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AN ECONOMIC HISTORY OF AUSTRALIA

LONDON

Cambridge University Press

NEW YORK • TORONTO
BOMBAY • CALCUTTA • MADRAS

Macmillan

TOKYO

Maruzen Company Ltd
All rights reserved

ECONOMIC HISTORY
OF AUSTRALIA

THE LATE

EDWARD SHANN

Professor of History and Economics
University of Western Australia

CAMBRIDGE

AT THE UNIVERSITY PRESS

1938

First Edition 1930
Reprinted 1938

PRINTED IN GREAT BRITAIN

This bool? fefdedicated to
the Memories of
FRANC GARSE

GRESLEY TATLOGK HARPER
GILBERT LAMBLE

GORDON CLONES McKAY MATHIESON
and

ARTHUR JOHN PEARCE

“The love of liberty is the love of others:
the love of power is the love of ourselves/^
W. HAZLITT

PREFACE

TH E following account of Australian economic de-
velopment attempts to keep in the forefront the
private activities by which British settlers in Australia
have transformed a prison-yard and hunting-ground of
savages into a productive annexe to Europe and Asia,
proud of using its labour-saving methods as means to
general well-being. Little, therefore, is said of public
finance. Studies of government expenditure on develop-
ment are being made, notably in the work of the Hon. F. W.
Eggleston, but it is fitting that they should be preceded
by an outline of the private activity which they have been
ostensibly designed to foster.

The scene of the new beginning here studied was a
distant and at first despised part of the dowry of that
fairest mistress “Trade”, for whom Britain, Holland and
France long fought. It was peopled first by outcasts, rebels
and adventurers, stifily governed for two generations by
British officials, and to this day is largely financed by the
British middle class. For a full century the little com-
munities were outworks of the industrial revolution in
Britain. In clearing the crowded gaols, in producing raw
materials and food for the city-dwellers of the old land,
they played a role of increasing importance in the grand
speculation of industrialism — that experiment on which
the British people have staked their capital, their mighty
energy, their very life-blood. Australia emerged from the
degradation of convictism by taking the place for which
Spain had proved inadequate in the divided tasks of
growing and manufacturing wool, both formerly discharged
by Britain herself.

To-day the democracy that rules Australia is disposed
to treat history as a record, as well forgotten, of the crimes,
follies and misfortunes of others. And Britain’s industrial
responsibilities as centre of the world economy have again

viii

PREFACE

been divided amongst pupils and partners. Three times
in the last fifty years, however, Australians of the rank and
file have had the chance to verify what ‘‘the papers’’ told
them of the changing world. On active service along
Australia’s lines of communication with Britain, they have
felt the heave of big events. When W. B. Dailey sent the
New South Wales contingent to Suakim, colonials on
active service were scarcely taken seriously: John Bull
could thrash the dervishes easily enough. But fighting the
Boers on the veldt was another business; and Australians
came home from it to their federated Commonwealth
aware that strong nations were coveting the resources of
lands under the British flag. The sense of a permanent and
secure world was shaken.

During the campaigns of 1915 to 1918, in numbers as
great as the Commonwealth could muster and partly
equip — numbeR whose going heavily checked the work
of farms, wharves and mines — Australians helped other
Britons and their Allies to meet the armed challenge. With
thinned ranks they came back, aware that the danger had
been repulsed at heavy cost. An era had ended. To them
too, as to Mr J. M. Keynes, “the most interesting question
in the world (of those, at least, to which time will bring
us an answer)” was “whether, after a short interval of
recovery, material progress would be resumed, or whether,
on the other hand, the magnificent episode of the nine-
teenth century was over.”

At first it seemed that a prosperity greater than that of
pre-war times had come. Home and external markets
moved from strength to strength, with little faltering even
in 1920-21 when Britain plunged into the long depression
that grips her still. In this access of wealth, Australians
one and all talked of making their country more self-reliant.
Clever men stampeded the democracy into measures seem-
ingly designed to make our economy a hermit one. The
coalition of parties in political power during the post-war
decade piled tariff upon tariff in favour of local secondary

PREFACE

industries, and sponsored crude plans to exploit the Aus-
tralian market in favour of struggling export industries.
Their talk ran high of making Australia another United
States, drawing increased wealth from the interchange of
products within the national boundaries. The realists in
opposition applauded each tariff and marketing scheme,
but, mistrusting American methods with labour, made
haste, by control of state-administrations and by pleas
before wage-fixing tribunals, to distribute income more
favourably for their supporters.

Australia certainly has need of greater self-reliance, but
she is not and cannot be another United States of America.
In place of the Mississippi Valley and Middle West she
has Lake Eyre and an arid, almost uninhabited, central
region. On her fertile but limited coastal fringes live six
or seven million people — about as many as inhabit Thibet.
Their resources are too scanty to be the basis, as those of
the United States are, of a Continental civilization, rival-
ling in economic power, by virtue of internal freedom of
enterprise, all the rest of the world. The more the policy
of a hermit Australia succeeded, the more surely would it
bring slothful intellectual standards, and, as a consequence,
material decay, until, with scorn, some sea power from
the world where necessity had maintained knowledge and
energy knocked in the closed door.

If she will but rouse her vigorous people to face facts,
Australia’s geographic position and relative immaturity
offer her a role in the world economy of greater importance
than that which she has already effectively filled. Inci-
dentally her White Australia policy would then become
internationally helpful. Seeking high efficiency and low
costs by reverting to the tariff policy of the young Common-
wealth (1902-1908), she can, for many generations to
come, stimulate the production of a greater surplus of raw
materials and foodstuffs. India, China and Japan are well
started on the road to industrialism. In a review of ‘‘The
Food Supply and Resources of China”, read during a

PREFACE

recent Pacific Science Congress in Java, a Chinese eco-
nomist, Shih Tsin Tung, concluded that industrialization
and rising standards of living in China would force an
increasing percentage of her 492 millions to rely on im-
ported cereals. Rice-growing countries could not supply
them. His countrymen, already consumers of 235 million
“tan”, or about 920 million bushels, of wheat, would
therefore find it imperative to change their food habits.
“The world’s uncultivated areas are mainly wheat-pro-
ducing land.” Geographically, with her wheat lands near
the coast, Australia is better situated to supply an in-
dustrialized Asia with foodstuffs than are the inland
prairies of America or the steppes of Russia. Her industrial
resources, well placed on the Eastern coast, would be
developed in due course as the internal economies of an
exchange kept technically alert by international com-
petition.

Progress on these lines is the logical result of the broader
market for Australia’s staple exports. She is now the
leading wool-grower for Continental Europe, Japan and
America, as well as for Britain. She is already finding
lucrative and growing markets for her wheat in Mediter-
ranean, Indian and Asiatic ports.

Self-sufficiency in finance would be the reward of self-
respect. Without restraint upon external borrowing, no
economy can continue sound. But there is no inconsistency
between continued activity in international trade and
financial self-reliance. Britain’s example demonstrates that.
Nor is there reason to doubt that all-round progress in the
arts would come unforced from a policy of fruitful trade
and international good feeling, and would make Australia
greater in the councils of the nations and a stronger member
of the British Commonwealth than she is to-day.

This book would not have been written but for the
encouragement given to the author by Professor Ernest
Scott, as Australian Adviser for the seventh volume of the
Cambridge History of the British Empire, The author’s thanks

PREFACE

are also due to the Syndics of the Cambridge University
Press for their permission to incorporate in this work the
substance of his contributions to that volume.

The footnotes to the text make abundantly clear his
obligations to others, and above all to Sir Timothy
Coghlan, the first to labour in these fields. In the footnotes
the writer has tried also to draw attention to the great
need for further and more detailed studies. An attempt
such as this at a wide synthesis is inevitably marked and
marred by mistakes of emphasis and lack of knowledge.
The author will be very grateful for help in correcting
these, both from the new Australian schools of economics
and from all students of this neglected subject. He already
owes a deep personal obligation to the officials of the
Mitchell Library, Sydney, and of the Melbourne and Perth
Public Libraries, for their unfailing zeal in assisting him
in his research among the books and papers in their
custody. Professor W. K. Hancock of Adelaide University
and Mr G. V. Portus, Director of Tutorial Classes in
Sydney, helped him gready with the earlier chapters, but
must be held blameless for the substance and point of
view. The conclusion emerges from the later chapters that
since the war Australia has allowed her “national policies”
to eat up the easy gains of a period of unusual plenty and
to exceed the effort towards self-sufficiency which she can
afford without over-capitalization. The writer hopes, how-
ever, that these pages may help to guide some of those
engaged in the task of reconstruction.

EDWARD SHANN

SOUTH PERTH, W. A.

January 1930

CONTENTS

Preface page vii

BOOK ONE

CONVICTS, WOOL, AND GOLD
1788-1 860

Chap. I. Governor Phillip and the Establishment 3

II. The New South Wales Corps ... 16

III. A Conflict of Evils 28

IV. “Governor Macquarie’s Bank” 48

V. An Autocrat in a Hurry .... 62

VI. John Bull’s Greater Woolsack . . 79

VII. Pioneering in the Pastoral Industry . 97

VIII. Shepherding and Marketing . . . 112

IX. Free Colonies and Assisted Migration . 134

X. From Transportation to Family Life . 151

XI. The Gold Rushes of 1851-1860 . . 167

BOOK TWO

COLONIAL PARTICULARISM
1 860-1 900

XII. “Unlocking the Land” in New South

Wales 189

XIII. Agricultural Settlement in the Southern

Colonies 212

XIV

CONTENTS

Chap. XIV.

Plantation Slavery and Secession for

North Queensland .

page 234

XV.

An Apostle of Restriction

260

XVI.

Inland Transport ....

281

XVII.

The Land Boom ....

298

XVIII.

Labour Shows Fight

316

XIX.

The Bank Smash and Economic Re-

construction ....

328

XX.

Back to Colonizing

349

BOOK THREE

THE COMMONWEALTH

XXI.

The Origins and Extension of Wage-

Fixing

365

XXII.

Strength and Protection

386

XXIII.

How Tariff Protection Grows

409

XXIV.

“Protection all Round”

427

Index .

448

BOOK ONE

CONVICTS, WOOL, <2? GOLD
1788-1860

CHAPTER I

o ^ o

Governor Phillip and the
Establishment

The first British settlement in New Holland was
planted on 26 January 1788 beside a litde rivulet,
known later as the Tank Stream, on Sydney Cove,
Port Jackson. It was not scenic beauty that attracted the
sailors, but the prime necessities of a seafaring people —
sheltered anchorage and fresh water. Ages earlier, larger
streams had carved out the deep valleys drowned under
Port Jackson. The headwaters of those streams had been
captured in some great earth change by the Nepean-
Hawkesbury river-system. Thus the harbour formed by
their submergence had escaped silt. Deep water slept in
all its hundred bays and arms.

But the plain behind lacked a fit scene for immediate
agriculture, the hard labour to which the convicts brought
by the First Fleet had been condemned; and it was walled
off from the rest of the Continent by the Blue Mountain
cliffs. Till the mountains were crossed it was a port without
a hinterland.^ The great sandstone gorges thirty miles
westward of the harbour beat back inland exploration for
a quarter of a century. Possibly the officials of a colony
that was primarily a prison cared no more than the
aborigines to know what lay beyond the ranges. Like the
aborigines, who obtained a sparse living from fish, game
and roots, they clung to the harbour shores.

The only denizens of the virgin land were primitive

^ Sec T. G. Taylor’s article on “Economic Geography” in the Australian
Encyclopaedia^ vol. i (third edition), pp. 504 et seq. and the larger works
it epitomizes, e.g. Australia^ Physiographic and Economic,

4 GOVERNOR PHILLIP AND

hunting tribes who, by restriction of their numbers and
by elaborate taboos, had adjusted their hunting to the
supply of game. No competition with other races or
cultures had narrowed their fields and enforced pasture or
agriculture, the domestication of animals and plants in
chosen spots. The intruders found a forest-clad country —
unkempt, uncanny and unknown.

Prisoners, emancipists and officer-settlers tilled a few
areas of alluvial soil which they found chiefly along the
Hawkesbury valley. The best of these, however, were liable
to sudden devastation by the flood-waters which the
Nepean-Hawkesbury system hurled seaward along one
narrow valley. As their harvests were swept away almost
as often as not, the exiles found their main support in the
stores and clothing brought firom overseas and served out
by the naval captains still in command. Unlucky delays
in re-victualling the little white population made equal
rations an established rule of early Sydney.

This was unfortunate. It confirmed in economic childish-
ness that first company of marines and convicts. Neither
criminals nor warders make a positive contribution to the
social economy of production and exchange. In early
Sydney this special department of British life was separated,
isolated and given the appearance of a new community.
But it proved difficult to introduce into it the main
activities of a self-providing society. The First Fleet had
been sent primarily to rid Britain of a troublesome ac-
cumulation of criminals. That good riddance was the
dominant motive is plain enough. Several of the early
batches of prisoners were sent without any record of indi-
viduals’ terms of imprisonment. If any thought was given
to their employment at the Antipodes, it was of the vaguest
character. Perhaps the reports about Botany Bay made
by Captain Cook and Sir Joseph Banks led the officials
to expect an immediate and abundant return from cultiva-
tion of the soil.

Governor Phillip’s instructions bade him treat “the

THE ESTABLISHMENT 5

productions of all descriptions acquired by the labour of
the convicts as a public stock”.^ Part of this he might use
for the subsistence of the convicts and of his civil and
military establishment. “The remainder of such produc-
tions you will reserve as a provision for a further number
of convicts who will shortly follow you.” But Cook’s
fertile meadows at Botany Bay proved to be sodden rush
flats, and around Port Jackson Phillip found neither the
land nor the men needed for instant and energetic tillage.

As far as eye could reach the country appeared “one
continued wood”. Trees “so large that the removing them
off the ground after they are cut is the greater part of
the labour” cumbered the whole country. Difficulties
with his human material proved greater still. The convicts,
numbering 717 at the landing, 529 being males, were the
sweepings of the prison hulks. Artificers and useful hands
had been retained in Britain. “The sending of the dis-
ordered and helpless”, wrote Phillip, “clears the gaols and
may ease the parishes from which they are sent, but if the
practice is continued, this settlement will remain for years
a burthen to the mother country. ”2 His sinister charges
were woefully unlike “farmers and emigrants who have
been used to labour and who reap the fruits of their own
industry. . . . Amongst the convicts we have . . . many who

are helpless and a deadweight on the settlement Those

who have not been brought up to hard work, which are
by far the greatest part, bear it badly. They shrink from
it the moment the eye of the overseer is turned from them”.

The eye of the overseer was universally needed. The
convicts were not led by the ordinary motives to honest
industry — they had therefore to be driven. Phillip had
counted on the loyal aid of the officers of the Royal
Marines who had come as guard over the convicts. To his
chagrin the officers, led by the lieutenant-governor Major

^ Historical Records of Australia, series i, vol. i, pp. 1 1-12, Grovernor Phillip’s
Instructions.

* H, R, of A, series i, vol. i, p. 197, Phillip to Grenville, 17 July 1790.

GOVERNOR PHILLIP AND

Robert Ross, ‘‘declined any interference with the con-
victs, except when they are employed for their own par-
ticular service”. The marines, they argued, had been sent
as a garrison; their duty as guard over the convicts
ceased at the landing. It was the first Australian strike,
and one on the part of the directing class. They even
objected to forming a court of criminal jurisdiction, an
essential service in such a community. “Here”, Phillip
reported, “are only convicts to attend to convicts and who
in general fear to exert any authority.” Productive labour
around Sydney broke down at once. In six months only
eight or ten acres could be sown with wheat and barley.
Even on these tiny patches the harvest failed : the seed had
been over-heated on the voyage out. The sharing of the
ship’s stores continued, providing an effortless subsistence
all too easily accepted by thieves and warders. The cult of
energetic production had to make headway against this
institution of paternalism.

In 1789 Phillip transferred the essay in public agricul-
ture to Rose Hill or Parramatta, where, at the head of
one branch of the harbour, he had found an open fertile
area. But the change of soil did not mend matters. Under
the only reliable supervisor, Henry Edward Dodd, a free
man who had come as Phillip’s personal servant, a hundred
convicts raised 200 bushels of wheat, 60 of barley and small
quantities of oats, flax and Indian corn. All of this was
preserved for seed, and as Dodd would not contemplate
remaining as a settler, the problems of food-supply and
of supervising convict labour were not solved. In every
despatch Phillip wrote of his need of continued supplies
and of competent superintendents. “Men have been
found” — this was in July 1790 — “who answer the purpose
of preventing their straggling from their work, but none
of them are equal to the charge of directing the labour
of a number of convicts with whom most of them are linked
by crimes they would not wish to have brought forward.”
A time-expired convict, James Ruse, had been given in

THE ESTABLISHMENT 7

1789 an acre of ground and a hut at Rose Hill “in order
to know in what time a man might be able to cultivate
a sufficient quantity of ground to support himself”. His
thorough tillage convinced Phillip that the colony would
support itself on its own produce as soon as free setders
with convict servants worked for their own hand on their
own land.

The attempt to grow food supplies by public agriculture
brought the colony to the very brink of collapse by starva-
tion. Phillip’s careful plans for the expedition had made
the voyage out a remarkably healthy one, but his foresight
as a ship’s captain could hardly be expected to extend to
the needs and functions of a farming community at the
Antipodes. No ploughs had been brought. Ground
cleared by cutting down the big trees and “grubbing
out” the smaller ones was hand-tilled between the stumps,
with spade and hoe, a method the honesty of which could
be ensured only by watching every stroke. Ruse said of
his farm, “I dug in the ashes, and then hoed it, never
doing more than eight or perhaps nine rods in a day,
by which means it was not like the government farm, just
scratched over, but properly done”. Phillip’s workmen
were all too likely to quarrel with their tools, and those
sent with the transports seem to have been of the poorest
sort. “Bad tools”, wrote Phillip in November 1791, “are
of no kind of use. Two or three hundred iron frying pans
will be a saving of spades. For cross-cut saws, axes, iron-
pots and combs we are much distressed.”

As herdsmen the convicts were of even less use. Phillip’s
instructions warned him to take the utmost care of the
livestock, for breeding purposes. “The settlement will be
amply supplied with vegetable productions and most likely
with fish.” But the convict herdsmen allowed the cattle
to wander off into the bush and get lost. The forty-four
sheep brought by the First Fleet also disappeared one by
one, the losses being ascribed to dingoes and native
spears.

GOVERNOR PHILLIP AND

With crops insufficient for seed at the next planting,
with livestock disappearing into the bush, Governor Phillip,
though he did not doubt “but that this country will prove
the most valuable acquisition Great Britain ever made”,
had good cause to reflect that “no country offers less
assistance to the first settlers, nor could be more disad-
vantageously placed with respect to support from the
mothej: country, on which for a few years we must entirely
depend”.^

Phillip’s early warnings prompted British officials to
send him relief, but unluckily their first attempt to do so
miscarried. The ‘Guardian’, a new fast-sailing 44-gun
ship, sailed in June 1789 with two years’ provisions for the
settlement, clothing, sails and cordage, medicines, blankets,
tools and agricultural implements. Having added plants
and stock to her priceless cargo at the Cape, she should
have arrived abofft the end of January or early in February
1790. “At that period the large quantity of livestock in
the colony ”,2 as it seemed to the Judge Advocate, “was
daily increasing; the people required for labour were,
comparatively with their present state,® strong and
healthy, . . . the ration of provisions would have been in-
creased to the full allowance ; and the tillage of the ground
consequently proceeded with in that spirit which must be
exerted to the utmost before the settlement could render
itself independent of the mother country for subsistence.”
Alas! On 23 December, after leaving Cape Town, the
‘Guardian’ collided with an iceberg. With great difficulty
the gallant Riou worked her back to that port.

At Sydney her non-arrival and the rapidly approaching
exhaustion of the 1787 salt pork and flour prompted

^ H. R. of A. series i, vol. i, p. 51, Phillip to Sydney, 9 July 1788. The
poor equipment may have been in part deliberate. W. Eden in a History
of New Holland, 1787, wrote of the convict as “a forlorn hope”, “a fair
subject of hazardous experiments”. “Offended justice in consigning him
to the inhospitable shore of New Holland does not mean thereby to seat
him for his life on a bed of roses.”

* D. Collins* Account of the English Colory in New South Wales, p. 84.

® These reflections seem to have been written in June 1 790.

THE ESTABLISHMENT

Phillip to put his people on half rations.^ He had some-
what earlier sent oflF the ‘Sirius’ to Gape Town for flour.
Field labour had to be suspended through sheer weakness.
The surviving sheep and cattle were eaten. It became a
struggle to survive, hardly different, save in the hope of
succour from overseas, from that of the aborigines around
them.2 Little flour was to be had at Gape Town. The
‘Sirius’ was sent on a second voyage to Ghina, but en
route she was wrecked off Norfolk Island whither she had
taken a detachment of 300 convicts and 70 marines. The
smaller store-ship ‘ Supply ’ was then despatched to Batavia.
Some convicts sent into the bush to shoot kangaroos
reported, after three weeks, that they had shot only three.
In each fishing boat armed guards were set to prevent the
complete plundering of the catch.

At last, on 3 June 1790, two months after the ‘Supply’s’
departure, the long delay was explained by the arrival
of a transport, the ‘Lady Juliana’. She brought an “un-
necessary and unprofitable cargo” of 222 female convicts
mostly “loaded with the infirmities incident to old age”
and “never likely to be other than a burthen to the
settlement”. But, as full counterpoise, came word of the
‘Guardian’s’ stores salvaged at Gape Town and of
other store-ships well on the way. A fortnight later,
20 June, the welcome signal of a ship in sight flew again
at South Head, and in came the 'Justinian ’ heavily laden
with stores. At the very end of the voyage each of these
ships had passed through a critical moment. “The ‘Lady
Juliana’, in standing into the harbour with a strong
southerly wind, got so close to the North Head that nothing
saved that ship but the set of the tide.”® The ‘Justinian’,

^ As to the scale of rations at various dates see H. R, of A. series i, vol. i,
p. 44 et passim^ vol. ii, p. 358, and T. A. Goghlan, Labour and Industry in
Australia, vol. i, pp. 55, 60, 62.

* What the early settlers thought of the aborigines may best be gathered
from Phillip’s despatch to Sydney of 15 May 1788, H. R, of A. scries i,
vol. I, pp. 24 et seq.', Early Records of the Macarthurs, pp. 33, 37; D. Collins,
op. cit. passim.

® Phillip to Nepean, 29 March 1792, H, R. of A, series i, vol. i, p. 347.

lo GOVERNOR PHILLIP AND

on 2 June, in the same heavy rain and wind, “unexpectedly
saw the land under her lee and was obliged to anchor on
the coast, very fortunately so near the rocks that the return
of the sea prevented her riding any great strain on her
cable. Had those two ships been lost”, wrote the stoical
Governor, “the colony must have suffered very severely
indeed”. The relief was of brief duration. Hard on the
heels of the ‘Justinian’ came the Second Fleet of convict
transports — the ‘Surprize’, ‘Scarborough’ and ‘Neptune’
— and out of them landed a ghastly company of sick and
dying. “Great numbers were slung over the ship’s side in
the same manner as they would sling a cask. Some died
upon deck, and others in the boat before they reached the
shore. There were landed not less than 486 sick.”^ The
voyage, especially aboard the ‘Neptune’, had been badly
found and abominably managed. By scurvy and “low
fever” there die^f on board that ship 158 out of her 502
convicts. On the ‘Surprize’ 36 died out of 256, and on
the ‘Scarborough’ 73 out of 259. Fifty more died within
a month of landing. “It would be a want of duty”,
reported Phillip, “not to say that it was occasioned by the
contractors having crowded too many on board those ships,
and from their being too much confined during the pas-
sage.” On 17 July 1790, three weeks later, he wrote of
450 sick “and many not reckoned as sick have barely
strength to attend to themselves. When the last ships
arrived we had not sixty sick in the colony”.®

Finally, to dash all plans of making the colony self-
supporting by agriculture, came drought of a duration
and intensity unknown in English experience. The seed
sown in 1 790 was barely recovered at harvest. In November
1791 Phillip had to feed and clothe 2570 male and 608
female convicts and 161 children. What wonder that his

^ Rev. R. Johnson to Mr Thornton, quoted in J. H. L. Cumpston and
F. McGallum*s History of Intestinal Infections (Commonwealth Department
of Health), p. 34.

* The Rev. Johnson adds some reflections on the “astonishing villany

THE ESTABLISHMENT

main thought was for a reserve stock of provisions to meet
any future emergency due to a wrecked store-ship? “When
the stores may permit the issuing of the established ration,
the weekly expence according to our present numbers will
be: Of flour 30,5601b., of beef and pork 21,010 lb., of
peas 179 bushels, of butter 1,432 lb., and our numbers
will be increasing.’’

Was ever a member of the versatile race of ships’ cap-
tains called upon to bear such a responsibility as his? In
husbanding these stores he pitted his almost solitary will
against thefts by convicts and marines alike. The former
“were ever on the watch to commit depredations on the
unwary, during the hours when they were at large, and
never suffered an opportunity to escape them”.^ “Of the
provisions issued on the Saturday the major part of the
convicts had none left on the Tuesday night.”^ By issuing
them on Wednesday and Saturday, and later daily, “the
days which would otherwise pass in hunger, or in thieving
from the few who were more provident”, were “divided”
and finally eliminated. Then the broken wards of a key
found in the store-house padlock led to the detection of a
conspiracy among the guard there. Seven of them had
systematically looted it of liquor and provisions. The one
on “sentry go” would admit two or more of the gang who
could procure what they wanted even though the patrols
visited the store while they were there. For the door was

of these wretched people When any of them were near dying and had

something given them as bread or ‘lillipie’ (flour and water boiled together),
or any other necessaries, the person next to him or others would catch the
bread out of his hand, and with an oath say that he was going to die and
that therefore it would be of no service to him. No sooner would the breath
be out of any of their bodies than others would watch them and strip them
entirely naked. Instead of alleviating the distresses of each other, the weakest
were sure to go to the wall. In the night, which at this time is very cold,
and especially this would be felt in the tents, where they had nothing but
grass to lay on (sic) and a blanket amongst four of them, he that was the
strongest of the four would take the whole blanket to himself and leave the
rest quite naked”. Loc. cit. p. 36.

^ D. Collins, op. cit. p. 8i.

• D. Collins, op. cit. p. 65 and p. 30.

12 GOVERNOR PHILLIP AND

kept locked and the sentinel stood alert and vigilant at his
post. But one night, after eight months of immunity, the
key broke. All the culprits were executed, yet some of them
had been held in high esteem by their officers. Such were
Phillip’s underlings. Against the depredations of rats
he strove incessantly, but they defeated every attempt to
clear the stores. The warping of timber, cut green and
of necessity used before it was seasoned, made every
building insecure.

Each of the benevolent despots, from Phillip to Mac-
quarie, groaned under the load of responsibilities which
the prison communism heaped upon his shoulders, but
none with more reason than the first.^ His command was
a mere dump for human rubbish. Such was the misery
of existence there that, out of sheer pity for the proposed
victims, Phillip refused to correct the disproportion of the
sexes by sending ships to take women from the Pacific
Islands, as bidden by his instructions. Efforts to escape
made by convicts were so determined that two men and
a woman reached Timor in an open boat. Several parties
set out to walk through the bush to China. Bass, when ex-
ploring, came upon a starving band of Irish escapees. He
shared his dwindling rations with them and they parted, not
without tears. But from the face of death they would not
go back with him to Sydney.

Yet Governor Phillip, as even Macquarie was later to
recognize, “with slender resources accomplished much”.
Not only did he house his charges and establish the begin-
nings of government with civil and criminal courts. His
ration system, based on a central commissariat-store, was
the economic last ditch, communism,® but it sufficed to
hold off wholesale death by famine. Before the ‘Justinian’
brought relief the ration consisted of 2^ lb. of flour, 2 lb.

^ Cf. Philip Gidley King to Under-Secretary J. King, 3 May 1800,
H.R. of A. series i, vol. ii, p. 505.

* Gf. Gustav Gassel, Theory of Social Economy, vol. i, p. 72.

THE ESTABLISHMENT

of rice and 2 lb. of salt pork per week, without trimmings.^
The Governor refused to draw more for his own table,
‘‘wishing that if a convict complained, he might see that
want was not unfelt, even at Government House By
1 792, however, he had spent his strength, and in December,
broken in health, he set out for England.

It was not a simple problem to convert this forlorn crew
of exiles into a free community providing for itself. As in-
structed, Phillip made land grants to time-expired con-
victs, free even of quit-rent for the first ten years. Thirty
acres were offered to each single man, 50 to the married men
and 10 additional acres for each child. Fresh regulations,
dated August 1 789, allowed him to grant discharged soldiers
80 acres each, and free settlers 130 acres. But he soon
found that to give a man land did not ensure his produc-
tive use of it. “Many inconveniences” attended the busi-
ness. “With some the sole object in becoming settlers
is that of being their own masters, and with others the
object is to raise as much money as will pay their
passage to England.” At his instance, later governors
were directed to make all grants non-transferable for
five years.^ Another “inconvenience” of small farming
near Sydney was revealed in his request (17 July 1790)
for permission to establish settlers in detached areas
“where the stock will be less liable to suffer from the
depredations which may be expected from the soldier and
the convict and against which there is no security”.

Governor Phillip granted only 3389 acres in all. Neither
legal restrictions nor isolation made the “settlers from
convicts” better able to read the riddle of agriculture in a
climate fruitful at times but fatally capricious. General

^ David Collins, op, cit. p. 46, tells of a herb called by the convicts sweet
tea” and held in great estimation amongst them: “The leaves of it being
boiled they obtained a beverage not unlike liquorice in taste”. Rapid con-
sumption soon made it scarce.

* D. Collins, op. cit. p. 80.

* H. R. of A. series i, vol. i, p. 441, Dundas to Grose, 31 {sic) June 1793.
Governor King improved on this by making grants to infant children which
could not be transferred until they came of age.

14 GOVERNOR PHILLIP AND

Orders did not govern the weather nor direct the colonists’
labours with foresight and imagination. These qualities
came to the colony, however, in the person of an ‘^ensign
in the New South Wales Corps”.

Among those who bore the torments of the Second
Fleet’s voyage were detachments of this force, which had
been raised for the special purpose of relieving Major Ross
and hiy Royal Marines from the task of superintendence
to which they had objected. The New South Wales Corps
were not a picked force, save perhaps in an evil sense.
Governor Hunter described them as ‘‘soldiers from the
Savoy (the military prison) and other characters who have
been considered disgraceful in every other regiment in
His Majesty’s service In the Colony they stultified the
efforts of every naval governor and kept the whole com-
munity in turmoil as long as they remained there.

The prime mover in these doings was invariably John
McArthur. Though born in Devon, he was the son of a
Jacobite of the ’45. His father’s brothers, it was said, had
all been slain at Culloden, and the sole survivor had fled
for a time to the West Indies. At John’s birth, his father
was an army agent at Plymouth, and in his service, no
doubt, John learned about trade. Entering the army in
1782, he retired on half-pay at the peace of 1783,
practised farming and read for the law. Then marriage
and “every reasonable expectation of reaping the most
material advantages ’’^ led him to join the New South
Wales Corps.

Even before Governor Phillip’s departure, McArthur was
eager to play the “spirited proprietor” and to develop, as
was then the vogue in Britain, a capitalistic agriculture. He
proposed to Phillip that he should retire from the Corps
on half-pay and on the condition that he should be granted
land and the labour of convicts to till it. Phillip had in

' H, R. of A. scries i, vol. i, p. 574, Hunter to Portland, lo Aug. 1796.

* Early Records of the Macarthurs of Camden, p. 2, Mrs John Macarthur to
her mother, Mrs Veale.

THE ESTABLISHMENT

1790 recommended the assignment of convicts to free
settlers, but now he hesitated. ‘‘I am very far from wishing
to throw the smallest obstacles in the way of officers
obtaining grants of land^’ he told Dundas in October
1792,^ “but in the present state of this colony the numbers
employed on the public buildings, in procuring the
materials and in other occupations equally necessary, does
not leave more than four hundred and fifty for agriculture.
From that number those convicts must be taken who are
to be given to officers or settlers, which will increase the
number of those who do not labour for the public, and
lessen those who are to furnish the colony with the neces-
saries of life.’’ The assumption that private settlers could
contribute nothing to the Colony’s supplies was born in
Phillip’s mind, perhaps, out of the feeble efforts of the
expirees. But the alternative of relying on prisoners’ tillage
of Crown land continued to prove a delusive one. Dundas,
in despatches dated 10 January and 14 July 1792,^ gave
Phillip a free hand to grant land, assign convicts and issue
provisions to officers and others who became settlers “pro-
vided the allotments are made not with a view to a tem-
porary but an established settlement thereon”.

These instructions, and the relaxation of control which
occurs in every despotism at a change of rulers, opened
the way in December 1 792 to a new economic policy.

^ H. R. of A, scries i, vol. i, p. 383.

* H. R. of A, series i, vol. i, pp. 328, 365.

CHAPTER II

The New South Wales Corps

IN the eighteenth century the power of the British
ruling class was as yet untempered by constant responsi-
bility to the opinion of the nation. In the army and
navy, prize-money and the spoils of war had whetted the
appetites of an island people never slow to seize their
chances of enrichment by plunder or trade.

But a communistic system, such as they had to administer
in early Sydney, demands, at least of its responsible chiefs,
self-sacrifice and devotion to the common welfare. Its
success depends upon the discovery of a successor to the
patriarchs of old. He must apportion the pooled resources
of the community in such fashion that each member of it
may be moved, not by calculation, but by the primitive
impulses of loyalty or fear, to do what in the sum of their
efforts will suffice for the needs of all. Aboard ship,
especially when tiny sailing ships ventured over wide
oceans, a sense of common danger from tempest or lee shore
might maintain this solidarity. Ashore, in a far land with
a seemingly genial climate, the discipline of a litde com-
mune made up of the worst possible human materials
went all to pieces. Such men as Grose and Paterson, and
even Hunter and King, though they applied with a zeal
that grew more ferocious with failure “tire peculiar caste
rules of the services”, proved as unequal as Bligh at Tahiti
to the changed demands on the sea-captain turned
patriarch.

They and their fellow-ofl&cers were “for the most part
simple, commonplace men, physically courageous and

THE NEW SOUTH WALES CORPS

intellectually vapid, men guided by a strange jumble of
uncomprehended motives — blind loyalty to the King, their
regiment or ship — blind acceptance of the Church of
England — mingled with love of liquor, greed of gain and
indifference to the usual tenets of morality. Few were men
of striking ability or forceful character, for the colonial
garrisons, a backwater of the Services and the retired list,
had little to show in those times of war in the way of
brains or energy”.^ Probably not one of those called to
fill Governor Phillip’s place saw that the conversion of a
prison camp into a free community was a sociological riddle
of some complexity. Each was beset by his social equals
for relaxations and concessions. Each was tormented by
Whitehall’s intermittent tugging on the financial reins.
Each reached the breaking strain and returned home
broken by failure. Yet for the most part their superiors
remained as blind as they to the changed and changing
realities in New South Wales.

To Phillip’s civil officials, Surgeon Arndell and the
Reverend R. Johnson, the changes which Lieutenant-
Governor Grose made as soon as “the Governor’s” back
was turned seemed a deliberate plunge into anarchy. The
civil court ceased to sit. Public agriculture was dropped.
Phillip’s admirable plans for the town of Sydney were
ignored. The officers were granted land wherever they
chose — land which soon included the former scenes of public
agriculture. Public order collapsed and a general licen-
tiousness raged unrebuked.

Grose and McArthur, on the other hand, reported a new
energy and prosperity. In February 1793 the former, as
Lieutenant-Governor, wrote of “the great spirit” with
which the officers to whom he had granted land were
clearing it “at their own expense. Whether their efforts
result from the novelty of the business or the advantages
they promise themselves I cannot say, but their exertions
are really astonishing 1 shall be prepared and thankful

^ Dr Marion Phillips, A Colonial Autocracy, p. lo.

i8 THE NEW SOUTH WALES CORPS

to receive as many convicts as can conveniently be sent.”
He thought the “settlers from convicts” an improvident
crew, but he encouraged them to bring maize to the
commissariat store by offering for it a fixed price of five
shillings a bushel, “it being at the same time a cheap
purchase for government and an accommodating market
for the settler”.^

McArthur thought the changes since the departure of
Governor Phillip “so great and extraordinary that to recite
them all might create some suspicion of their truth”. They
had in a short time lifted the settlement from “a state of
desponding poverty and threatened famine. . . . As for my-
self I have a farm containing 250 acres, of which upwards
of a hundred are under cultivation. I have at this moment
20 acres of fine wheat growing, and 80 acres prepared
for Indian corn and potatoes. My stock consists of a horse,
two mares, two'tows, 130 goats, upwards of a hundred
hogs. Poultry of all kinds I have in the greatest abundance.
I have received no stock from government but one cow”.
That to the father of Australian pasture this petty goat
and poultry run should seem almost incredible progress
makes the “desponding poverty”, against which it looked
well, dark indeed.

The surgeon and the parson in Sydney reported to
Governor Hunter other aspects of the military rule. ‘ ‘ Crimes
of every sort increased to an alarming degree; thefts and
robberies became so numerous that they were spoken of
as mere matters ofcourse.”^ “Assaults the most outrageous

were frequently committed As no pains were taken to

inspire a reverence for religion, the Sabbath, instead of
being passed by the people in attendance at divine service,
was profaned as a day particularly appropriated to gaming,
intoxication, and uncontrolled indulgence of every vicious
excess.” A drunken convict whom he met on the Parra-

^ Grose to Dundas, 3 September 1793, series i, vol. i, p. 448.

* Arndell to Hunter, H. R. of A. series i, vol. ii, p. 183. Cf. Rev, R.
Johnson to Hunter, p. 178.

THE NEW SOUTH WALES CORPS

matta Road offered to break the good Surgeon ArndelPs
head with a bottle of rum which he had refused to
share. When the clergyman failed to finish service in
the short half-hour allotted him by military orders, the
drum beat and, to his chagrin, out marched both guard
and congregation.

Agricultural activity and contempt for order, morals
and religion flowed, it would seem, from the same tap,
that is, from the rum used as a makeshift currency — a
strange instrument of progress but one congenial to that
strange company. Among the ‘‘articles to be sent to New
South Wales in consequence of Governor Phillip’s represen-
tations’’ the store-ship ‘Britannia’ had carried in January
1792 “9,278 gallons of rum, being the allowance of half
a gallon per annum”. Phillip was especially pleased at the
inclusion of the convicts “for it is a bounty which many of
those people well deserve and to the undeserving it will never
be given”. He reckoned without his host. Not much longer
was his will alone to decide to whom it should be given.

By the same ship came word that recruits for the New
South Wales Corps in England had been promised, as a
condition of enlisting, “the usual ration except spirits,
without deduction from their pay”. Dundas thought the
same offer made in New South Wales would be “a strong
inducement to some of the marines to enlist in the ad-
ditional company”.^ He overlooked the fact that in the
communism of semi-starvation guard and convict alike had
been given, and had come to regard as their right, a share
of whatever was to be had and that the consignment of rum
was intended for both. Phillip saw that the soldiers would
think little of free lations.^ Everyone drew them. But
the deprivation of spirits would put them on a lower plane
than the convicts. While he hesitated, and despite his
forebodings. Major Grose and his brother-officers chartered
the same store-ship, the ‘Britannia’, to bring a cargo from

^ Dundas to Phillip, 10 January 1792, H. R. of A. scries i, vol. i, p. 331.

* Phillip to Dundas, 2 October 1792, H, R. of A. series i, vol. i, p. 377.

20 THE NEW SOUTH WALES CORPS

the Gape which might “relieve the soldiers’ necessities”
and afford them “ Comforts other than the reduced and
unwholesome rations served out from the stores”. Within
a few days of Phillip’s departure, moreover, an American
ship, curiously named the ‘Hope’, arrived at Sydney,
offering spirits and provisions, which the new Lieutenant-
Governor bought, seemingly in fear of drought. He told
Dundas that he had the less reluctantly bought spirits as
well as provisions, “as it appeared from your letter of the
15th Mayi that it was intended to issue spirits to the non-
commissioned officers and private soldiers”. Dundas had
foreseen that the coming of whalers would necessitate super-
vision over their usual rum-trading. In a later despatch,
oddly dated the 31 June 1793, he warned Grose against
allowing spirits to be secretly sold to convicts, and bade him
subject the trade to “the view and inspection of proper
persons directed'*by you to attend the same”. But private
exchange, however well watched, relaxes the commissary’s
grip upon a communistic economy. The 7597 gallons of
rum obtained firom the ‘Hope’ had long since been sold
mainly to the only persons Grose was likely to direct as
“proper to attend the same”, that is to the officers of the
Corps. They had quickly organised the bringing of more
from Bengal, Batavia, and Rio de Janeiro as well as from
Massachusetts, for they were finding it a most acceptable
means of hiring labour and buying produce.

The home authorities, thinking an isolated prison would
have no use for money, at first provided none. Convicts
worked as punishment, and Whitehall paid in England
for the freight of the store-ships. What use was there for
money? If goods had to be bought from visiting ships or
elsewhere, the Governor might draw bills on the Treasury.
Things worked out much less simply at Port Jackson.
Officers whose pay was due in London could draw bills

Grose to Dundas, 9 January 1793, series i, vol. i, p. 414. The

letter mentioned had arrived only a few days after Phillip wrote his com-
ments on the exclusion of rum from the soldiers* ration.

THE NEW SOUTH WALES CORPS

as well as the Governor. Thus they too could buy goods
from whalers and others. What they bought they bartered
for labour with which to till or improve the 15,639 acres
granted during the three short years of military ascendancy.
Much of the labour they obtained at first for nothing
from assigned servants victualled at the stores. Later it
cost the price of its “keep” when under Hunter and King
they were required to pay for such servants’ rations. But
thereafter they found it expedient to pay wages in “ truck ”,
either rum or provisions, to three grades of labour,
(a) “government men” working in their own time, (b) as-
signed servants, and (r) expirees.

Phillip had at first set the convicts to work from sunrise
to sunset, as part of their punishment. All did as little as
the lax supervision of their fellows would exact. To en-
courage effort he therefore defined certain tasks as a day’s
work, and set the convict who had completed his task free to
cultivate his garden or to do as he chose. In Phillip’s
time he seldom chose to work for others. The officers were
forced to follow suit and define daily tasks for their
assigned servants. Then, to keep control of their servants
after the not exacting task was done, they too found it worth
while to offer some reward as an inducement to extra
work. Expirees were in a position to demand wages for
the whole time worked. They had the alternative of ap-
plying to government for a settler’s grant and for cattle
from the public herd with which to make an independent
home and start life afresh.

Rum, as Phillip foresaw, proved a much appreciated
relief from the store rations. But it was more. So univers-
ally acceptable was it that it became a medium of exchange,
a commodity for which convicts, whether in the government
gangs or assigned, were ready to do extra work. Expirees
would take payment in rum; and for rum, too often,
settlers bartered their produce. Most who took it were
content to consume it themselves. Provident habits were
rare. The convicts drew rations from the stores, and expiree

22 THE NEW SOUTH WALES CORPS

settlers did the same until their farms were producing.
“Much work’’, wrote Hunter to Portland, in excusing his
tolerance of rum, “will be done by labourers, artificers and
others for a small reward in this article. . .which money

could not purchase It is not by an extra allowance of

the common slop clothing or the provision issued from the
public ^store that this labour is to be obtained, for those
men as well as women who have been some time here,
and particularly those whose term is expired and who are
disposed to work, aspire to a better kind of dress and are
desirous of indulging with their tea and sugar, as well as
the gratification of a little tobacco and spirits at times,
which whilst thus applied with moderation is certainly not
ill employed”.^

Beyond a doubtful half-gallon per annum, however, the
generality could -^et rum only by working for those who
had it to give. So for the twenty years or more that it
remained the customary means of paying wages, rum
placed the key to wealth in the hands of those who could
answer the convicts’ insatiable call for it. Grose and his
associates, with McArthur playing as ever a leading part,
had supplemented Phillip’s ship-board communism in
necessaries by an exchange economy based on truck
wages, with rum as the main item of consumption and
motive for exertion. These officers may have known little
and cared less about the implications and possible
results of what they were doing. Perhaps such a change
was inevitable to colonists of a trading race, and trade
was in sight as soon as Ruse, the first expiree setder,
grew more grain on his little farm than his family could
consume. Its evil form, with rum as currency, expressed
the neglect of Whitehall to provide a local money and
the character of the ruling class who repaired the omission.

In their days of power they laid themselves out to make
the best of both worlds — the wages system of England and
the rations of her New Holland prison. Explaining to

^ H, R, of A, series i, vol. i, p. 593, Hunter to Portland, August 1796.

THE NEW SOUTH WALES CORPS

Whitehall that it took time to make land fruitful, Grose
allowed the officers, including himself, to draw rations and
slops from the public stores for their assigned servants.^
The expense soon roused the ire of the Treasury, which was
paying for produce twice over — first in the rations used in
growing it, and then in the fixed prices for the wheat,
maize and meat delivered at the stores. Under pressure
from home, and in spite of outcry from the subsidized
infant industry. Governors Hunter and King charged the
landowners for the rations drawn. Subsidized industries
never willingly grow up. Whitehall then tried to set the
clock back and to replace all purchase of settlers’ produce
by direct filling of the stores with grain and meat grown
by the convicts on government farms.

The exchange economy, however, inevitably triumphed
over communism. It called into play motives of self-
interest and hope more continuous and powerful than
fear of the government overseer. Using a common
third as reward, it gave to all who would make the effort
freedom to decide by what service they could gain more
of that reward. Expirees and officers might grow grain
and produce for the stores or for private sale. Even the
convict, apart from the penal chain-gangs, might work for
wages. These were paid in “truck” at computed prices,^
and the officers, it is true, made their official privileges a
screen for much that was villainy by our standards. Yet,
even an exchange economy based upon tyranny and rum
offered a freedom to experiment, a career open to talent,
unknown in the lethargy of institutional communism.

Even the most selfish feature of the military regime, the
assignment of convict servants to cultivators, was a step
in advance of their serried degradation in the government
gangs. When assigned to cultivators the convicts’ services

^ Dundas had given an implied permission to do this. See //. R, of A.
series i, vol. i, p. 328.

® See the Rev. R. Johnson’s statement of the cost of erecting the first
church, reproduced in facsimile in vol. i, p. 263, of the Australian Eru^clopaedia.
Gf. H. R. qf A, series i, vol. i, p. 451.

24 the new south wales corps

were in legal form lent, not sold. They remained ‘‘govern-
ment men”. Beyond question these assigned servants were
harshly used.^ In 1800 Governor Hunter made the pre-
sentation of delinquents before a magistrate the preli-
minary— for it very rarely proved an obstacle — to their
punishment. Until then masters had assumed a right to
horsewhip them. The effect of the system on the attitude
of employers to labour must not be minimized, but there
was a germ of economic freedom in the mere facts of trade
and of payment of wages by “truck”. All the degradation
and extortion which accompanied the use of rum could
not blot out the dawn, through that sinister method, of
the freedom to produce and consume as he chooses which
the use of money brings to the individual. A bad money
may lead the individual to use that freedom ill, but it may
later be replaced4>y a good money which does not.

From the first the new economy put power into the
hands of those who rose superior to the evil of the money
they used. Elizabeth McArthur’s pen-picture of Elizabeth
Farm at Parramatta, written shortly after Governor
Hunter’s arrival, is one of freedom confined to a dominant
few.^ “For such as have many in their employment it
becomes necessary to keep on hand large supplies of such
articles as are most needed, for shops there are none. . . .
The officers in the colony, with a few others possessed of
money or credit in England, unite together and purchase
the cargoes of such vessels as repair to this country from
various quarters. Two or more are chosen from the number
to bargain for the cargo offered for sale, which is then
divided amongst them in proportion to the amount of their
subscriptions. This arrangement prevents monopoly, and

^ See Adventures of Ralph Rashleighy pp. 1 53 et seq. This book, though the
epic quality of some of the adventures makes the element of fiction evident
enough, has a value akin to that of the Homeric poems in its vivid por-
trayal of the customs and setting of old colonial days.

* Macarthur Records y p. 51. It is there dated i September 1795, but this
is a slip. References in it to Macarthur’s resignation of his superintendence
of government agriculture and to the season of the year make it plain that
it was written in 1796.

THE NEW SOUTH WALES CORPS

the impositions that would be otherwise practised by the
masters of ships/’

As to the market from which they obtained a return for
this expenditure on truck, she says, “some thousands of
persons are fed from the public stores, all of whom were
formerly supplied with flour from England to meet the de-
mand for bread. But since so many individuals have cleared
farms they have thereby been enabled to raise a great
quantity of grain in the country, which is purchased by the
Commissary at i os, a bushel, and issued for what are termed
rations. In payment for which the Commissary issues a
receipt, approved of by the Government. These receipts
pass current here as coin. When any number have been
accumulated in the hands of individuals they are returned
to the Commissary, who gives a bill on the Treasury in
England for them. These bills amount to thirty or forty
thousand pounds annually. How long the Government
may continue so expensive a plan it would be difficult
to foresee. Pigs are bought upon the same system as would
also be sheep and cattle if their numbers would admit of
their being killed. Beef might be sold at 4^. if not 5.^. the lb.
A good horse is worth ;^i40 to ^(^150. Be it ever so bad
it never sells for less than £100. From this statement you
will perceive that those persons who took early precau-
tions to raise live stock have at present singular ad-
vantages”.

In Mrs McArthur’s description one may detect a sense
that the control of the market by the early birds was too
good to last. Chafing at the officers’ “singular advan-
tages ”, such as their monopoly of imported goods, the settlers
from convicts sought the intervention of Whitehall and of
the Governor. A petition addressed in February 1800 by
the settlers around Parramatta to the Seeretary of State
tells how that monopoly weighed upon them. It is the
other side of the shield Elizabeth McArthur held up — a
picture of “intolerable burdens which have not only cut
off all hope of their independence, but reduced them and

THE NEW SOUTH WALES CORPS

their families to a state of beggary and want, and in-
capacitated them from prosecuting the culture of their
lands with vigour. . . .The tillage of land in this country’’,
they explain, ‘‘is conducted in a different manner from
what it is in Europe, the latter with the assistance of horses
and oxen, the former wholly by men, who to keep pace
with the growing extortion of monopolists and dealers,
rise {sic] the price of their labour in proportion to the
price of imported commodities. The price of grain being
fixt, the poor settlers have no means of avoiding the im-
positions of the dealer and labourer, but are crushed under
the heavy weight of expences attending agriculture, which
frequently exceed the amount of their crops. In fact the
whole of the very exorbitant profits of trade are extorted
from them rather than the consumers of any other des-
cription, who in general are indifferent what prices they
give for any article as the burden of expences falls on the
land holders”.^

The boon which the petitioners sought, as a remedy for
all their ills, was a return towards government tutelage,
the establishment by the government of “a public ware-
house, from which the settlers might be supplied with
every necessary article at such a rate as would not only
enable them to meet the wishes of His Excellency Governor
Hunter in his intended reduction of the price of grain, but
also considerably diminish the expences of government by
enabling the landholder to support his family, who from
mere indigence are now dependent on the public store”.

The settlers on the Hawkesbury, from whom were
demanded prices even higher than those instanced by the
Parramatta petitioners, solved the problem by direct
action. They set up stills in the rough country behind
Green Hills, and distilled “rum” from their own grain.
So busy was the traffic in this “moonshine”, sold at first
at six shillings a gallon, that a grain shortage threatened.

^ H,R, of A. scries i, vol. ii, p. 442. Gf. vol. ii, p. 607, Governor King to
Portland 28 September 1800.

THE NEW SOUTH WALES CORPS 27

More than the crooked ways of Sydney streets may thus
be traced to the period of military rule. Wage earners under
the wing of a benevolent government, traders meeting
every increase of wages by exacting higher prices for their
wares, a country population between the upper and nether
millstones of regulated wages and prices seeking state
assistance, but ready to pursue its own interests by the
most direct means — all may be descried in the first dawn
of exchange in New South Wales.

CHAPTER III

A Conflict of Evils

O oAb o

Governors Hunter, King and Bligh, who
followed Phillip in the dynasty of ships’ captains,
were successively the focus of conflict between
their masters at the Home and Colonial offices^ and their
servants in the New South Wales Corps. The period 1789-
1810 also saw the stubborn maturing of the McArthurs’
plans to grow fine wool for export, but the events in which
the colonists w^re^int crested revolved in squalid turmoil
about two bad businesses — public agriculture and the trade
in rum.

General John Hunter’s first impression of the colony he
had last seen in the gloomy days of 1792 was one of ad-
miration for a “state of agriculture and the breeding of
livestock” far above his expectation. Under the spell of
the “extremely well-qualified Inspector of Public works”,
Captain John McArthur, he concluded that this was the
result of “the raising of grain and the breeding of live
stock in the hands of private individuals. They are self-
interested in what is their own property and it certainly
succeeds better with them than in the hands of govern-
ment”. He assumed that the repetition in his instructions
of the old direction to raise a “public fund” by the labour
of convicts had been antiquated by colonial experience
since its first issue. “If Government were to continue to
cultivate land sufficient for the maintenance of whatever
number of convicts may be hereafter sent out, there would

^ As to the various offices and secretaries at Whitehall responsible at
different dates for the Australian colonics see the article ‘‘Colonial Office’^
in the Australian Encyclopaedia^ vol. i, p. 282.

A CONFLICT OF EVILS

be an effectual stop to the exertions of industrious farmers,
for want of a market for their crops. That we shall soon
have abundance there is scarcely any reason to doubt.’'
Rations, too, would provide an inelastic basis for a com-
munity bound to grow in numbers and wants and to
escape out of the Governor’s hand. Children of convicts
were not born prisoners nor did expirees always sink again
into bondage. The success of independent producers would
incite and educate enterprise in others, and exchange
would enable such folk to share their successes.

Hunter’s superiors at home, however, refused to see that
any conflict need arise between communism and freedom
to produce and exchange. ‘‘Nothing”, according to the
Duke of Portland, “ought to be more reconcileable than
the public interest of every State and that of the individuals
who compose it, and as that union must be the consequence
of proper management, I am persuaded it cannot be more
likely to be effected than in a country the government of
which is placed in your hands.” This, from a Duke and
a Cavendish-Bentinck to an old sailor^ whose public duty
had always been his conscience, was irresistible. Yet
Whitehall’s injunctions to keep down expenses and main-
tain prison agriculture made an uneasy and divided duty.
Refusing McArthur a salary as inspector of public works.
Hunter lost his services. To withdraw assigned servants
and resume public agriculture on exhausted fields would,
he clearly saw, jeopardize existing production and force
him to draw more bills on the Treasury in payment for
imported flour.

Even the herding of public stock by convicts was wasteful
in the extreme. “The hog not being a grazing animal and
there being nothing in the country yet discovered for their
sustenance but grass, they cannot be allowed to run at
large ; they must be confined and fed upon corn ; and very
considerable is the quantity they require. Every little
farmer can afford to feed a few upon the refuse or damaged

' Hunter was 58 when he returned to New South Wales as Governor.

A CONFLICT OF EVILS

corn, and sell to the government at less than half of what
it would cost the public if rearing large numbers. Numer-
ous herds of such animals allowed to run loose would also
be dangerous to the farmer whose grounds are yet all
open.” The only effective convict herdsman had been the
one who in 1788 lost in the bush a Cape bull and some
cows belonging to Governor Phillip and “Government”.
Just aftgr Hunter’s arrival they and their progeny, number-
ing over forty, were found on the far side of the Nepean,
south-west of Sydney, in a fertile valley thenceforth known
as the Cowpastures. It was decided to leave the herd
unmolested, as a valuable reserve of beasts for future
emergencies.

The officers’ estates continued to prosper despite Port-
land’s insistence and Hunter’s orders that the rations and
clothing issued to any assigned servants, other than two
batmen per offic#, should be paid for in produce or
cash.^ McArthur introduced a labour-saving device in
1796 — the first plough seen in New South Wales — and so
kept up the profits of agriculture even under the new rule.

For the convicts remaining in or returned to govern-
ment employ Hunter found work on public buildings
rather than in public agriculture. His efforts to enforce
attendance at divine service had been ill-received in that
cantankerous colony. Someone burnt down the church.
“Double-logged” gaols at Sydney and Parramatta were
equally or more unpopular and v/ere “burnt by design”.
Stone windmill towers, barns and storehouses and a few
roads and bridges lasted better. But McArthur under-
mined Hunter’s credit with the Duke of Portland, already
endangered by his preference for private to public farming.
He reported the Governor’s partiality in allowing some
cultivators the use of more than two assigned servants
victualled “on the stores

^ General Order, May 1798, H, R, of A. series i, vol. n, p. 215. Gf. vol. i,
p. 647.

* H, R,0f A, series i, vol. ii, pp. 89 to 93

A CONFLICT OF EVILS 31

Philip Gidley King, a man of smaller mind but greater
energy than Hunter, bought the favour of Whitehall by
undertaking to renew prison agriculture, and despite such
crudities as hand tillage, harvesting with sickles and trans-
port to the barns on convicts’ backs, he did draw better
returns from land at Toongabbie and a farm he rented
on the Hawkesbury. But he, too, was soon lamenting the
inferiority of public to private farming. In 1801, his first
season of office, the ‘‘full rations victualled” numbered
2365 and required 29,640 bushels of wheat. The produce
of government lands made up 8000 bushels, leaving a
“deficiency to be supplied by individuals” of 21,640
bushels. “Individuals” that year won 60,000 bushels from
some 4000 acres. “As the labour of prisoners working on
public ground is exacted from them by the hand of
authority, they are not actuated by the same motives as
those who labour for their own profit. This, with their
very bad characters and former pursuits,. . .requires a
constant and unremitted attention to make their labour
the least beneficial. . . .The overseers are not much better.

. . . Notwithstanding the assistance given by the super-
intendents, every exertion necessarily falls on the Governor
who alone is responsible and consequently interested in
the advancement and prosperity of the colony.” This is
not a flattering picture. It exposes all too plainly the
Achilles’ heel of communism — its incapacity to organize
production adequate to support its liberal consumption.
Denying scope to ambition, it relies on the intermittent
motive of fear.

The continued progress on officers’ farms made it easy
for King to enforce strictly the home authorities’ ruling as
to assigned servants. General Orders defined clearly the
conditions on which such labour was lent, and required
all who received assigned servants to sign these terms and to
make regular returns of those they employed.^ The Order

^ Sec H, R. of A, scries i, vol. ii, pp. 622-4, for General Orders of i and
2 October 1800; vol. iii, pp. 35-7 and 43 for later Orders.

A CONFLICT OF EVILS

of 31 October 1800 enacted quite a code of wages and
conditions of employment. From this it appears that
assigned servants and convicts working in their own time
expected, over and above their rations, about ten shillings
a week. By the end of King’s term of office the assignment
of convicts’ labour had become, in Coghlan’s phrase,
“a legal covenant between the Government and the em-
ployer, that the latter should maintain a convict for a
certain ^period, receiving his labour in return”. The
Government retained, as it had not done in the American
colonies, responsibility for the reasonable treatment of
convicts. Their labour was leased on terms which defined
the convict’s living and relieved government of expense
but not of a certain care for the ‘‘servants of the crown”.
In health their misdeeds could legally be punished by the
Governor alone. In sickness they were returned to official
keeping. By good .xjonduct they might earn a conditional,
even an absolute, pardon. In any event the assigned
servant who satisfied his master escaped the degradation
of the government gangs. ^ He remained a protected
subject and escaped on sufferance from the heavy hand of
justice.

Prior to Governor Macquarie’s time, little was done to
better the lot of the women convicts. The method of
selecting for transportation to New South Wales, as de-
scribed by the Committee on Transportation in 1812, had
in view rather the riddance of Britain and Ireland of their
worst scum than the reform of those transported. “With
respect to female convicts it has been customary to send
without any exception all whose state of health will admit

of it, and whose age does not exceed 45 years Your

committee arc aware that the women sent out are of the
most abandoned description, but yet with all their vices

^ Cf. Hunter to Portland, 10 June 1797, H. R. of A. series i, vol. ii, p. 20
“We frequently substitute for corporal punishment a certain time to labour
for the public . . . and this is more felt by the criminal than any other
punishment.**

A CONFLICT OF EVILS

such women as these were the mothers of a great part of
the inhabitants now existing in the Colony, and from this
stock only can a reasonable hope be held out of rapid
increase to the population”.^ Their early treatment had
been a mixture of negligence and brutality. Some
were taken as wives or servants by settlers, soldiers or
convicts. Those left on the Government’s hands were
set to work at making up slop clothing, and, when
a factory had been built for them at Parramatta,
were employed in the weaving of a coarse cloth out of
which blankets and rough jackets were made. Prior to
the reforms instituted at Castlereagh’s bidding after 1812,
when the wretchedness of their lot had become known, the
one gleam of humanity in this chapter of evil was Governor
King’s strong support of orphanages, primarily for girls, at
both Sydney and Parramatta. “To save the youth of the
colony from the destructive examples of their abandoned
parents” he showed a continued zeal in appropriating
minor sources of colonial revenue to the maintenance of
the orphanages.

Governors Hunter, King and Bligh, each in his own
manner, opposed the rum-traders’ readiness to give such
a public what it wanted, “a fiery poison” fatal to the
consumer’s sense of his own welfare. Here was fi'ee enter-
prize at its worst. The presumption on which the general
case for free enterprize rests, of a harmony between indi-
vidual wealth and general welfare, was in this instance
obviously at fault. In three ways the naval governors
restricted the supply of spirits; by licensing houses for its
retail sale, by limiting imports and by suppressing illicit
distillation from grain. More effective in the end were an
alternative system of exchanging grain for stores, and the
provision of a sound money with which anyone might safely
trade for cash.

^ Report of Committee on Transportation, 1812, pp. 9-12. The Committee
was opposing Macquarie’s representations against the sending of women
convicts, e.g. 30 April 1810: “Female convicts are as great a drawback as
the others are beneficial.”

S H

A CONFLICT OF EVILS

Hunter’s attack on the officers’ trading monopoly was
easily bluffed off. As with the rationing of assigned
servants, he hesitated and was lost. Though explicitly
instructed to allow no spirits to be landed without his
consent, he wondered whether such orders would be
obeyed, and put it to Portland that there was much to be
said for rum as a reward. By November 1796, however,
he w^ alive to ‘‘the astonishing state of indolence and
indifference about the affairs of the public which the
private traffic of individuals have (szc) brought about”.
The general licentiousness arose, he thought, from the
unseemly activity of the officers “in a most pernicious
traffic with spirituous liquors”. Considering the advan-
tages given them, he felt the strongest astonishment “that
they should have ever thought of condescending to enter
into trade of any kind, except that of disposing to Govern-
ment the produije of their agricultural labours”.

Hunter’s opposition proved, however, a mere wringing
of hands. He forbade licensed dealers to pay for settlers’
grain with spirits, but he could notbring himself to employ,
against his social equals, a police recruited entirely from
the convict class. Almost every official was in the ring,
and the Governor was isolated and powerless. Field of
Mars settlers asked him to give them an official credit on
their grain, so that they might themselves buy part of a
ship’s cargo and escape the snares of “dealers, pedlars and
extortioners”. Hunter’s only response was a fatuous
General Order, 25 June 1798, desiring all settlers “to
keep possession of their own money until they are apprised
by public notice that a cargo has been brought, the
officers having undertaken the trouble of officiating as
agents for the general benefit of the whole colony”.

This order led to his recall. It confirmed the impression
of incompetence he had given by fumbling the project of
selling imports at retail from the government store. ^ This

^ H, R, of A. scries i, vol. ii, p. 19, 10 June 1797, and p. 114, 10 Jan.

A CONFLICT OF EVILS 35

he twice recommended, the second recommendation draw-
ing the curt answer that he had already been told to do it.
His General Order of June 1798 about the self-sacrificing
officers meant, he was informed, ‘‘a sanction to the
officers to engage in traffic ” and therefore an apology for the
disgraceful doings he had so hotly denounced. In January
1800, still unmindful of his fall, he frankly confessed his
impotence to control McArthur’s importation of spirits.
‘‘I am sufficiently experienced here to know that whilst
the article sought after is in this harbour, or indeed any
other on this coast, it is impossible to counteract the
designs of those who wish to have it. . . . To oppose its being
landed, my lord, will be vain for want of proper officers
to execute such orders as I might see occasion to give.”

Philip Gidley King meant to be a Governor of tougher
will. General Orders flowed from his pen like thunderbolts
from high Olympus. Spirits might not be sold ‘‘from the
beating of the tap too ^ until the following noon, nor during
Divine Service”. Persistent unlicensed sellers should serve
three months on the hulk ‘Supply’. The clash was not
long in coming. A creature of McArthur’s was convicted
of trading spirits with convicts for their rations of salt
meat — a powerful incentive to theft by the hungry. He lost
his licence and had his liquor staved.^ Shortly after this
declaration of war, McArthur found himself in temporary
command of the New South Wales Corps, and, a disagree-
ment having arisen over the court-martial of an officer
accused of petty thieving, he contrived to isolate Governor
King by a social boycott. He so far succeeded with the
Junior Officers, that Colonel Paterson on his return could
find no other means of answering the extension of the
boycott to himself, for refusing to participate in it, than a

^ This old form of the word “tattoo” is a reminder of its origin in the
Dutch phrase “de taptoc slaan”, to close the taps.

® H. R, of A, series i, vol. in, p. 323, P. G. King to John King. Also
vol. ni, pp. 45-6. The distinctive stripe on the convicts* dress was first used
to prevent the sale of new clothing as soon as it was issued. Cf. vol. i, p. 308,
Philip to Nepean, 18 November 1791.

3-2

A CONFLICT OF EVILS

challenge to McArthur. They met. Paterson was seriously
wounded. King put McArthur under arrest. Then he
ordered him to proceed to Norfolk Island in charge of a
detachment. McArthur refused to go until his arrest was
cleared by a court-martial. King, holding the only officers
who could compose such a court to be ‘‘no impartial
judges’’, sent him off to England.^

By a ship other than that bearing the official account of
this turmoil, the Governor pictured to his namesake, the
Under-Secretary, McArthur’s ascendancy in the colony
and his own predicament in “belling the cat”. “He came
here in 1790 more than ;^500 in debt, and is now worth
at least ;;^20,ooo. . . . His employment during the eleven
years he has been here has been that of making a large
fortune, helping his brother-officers to make small ones, and
sowing discord and strife.” King counted on McArthur’s
resignation from the New South Wales Corps. “But come
out here again he certainly must, as a very large part of
his immense fortune is vested here in numerous herds,
flocks and vast domains.” Greater than these resources,
however. King rated the “art, cunning, impudence and
basilisk eyes” by which McArthur was able to achieve any
object he pursued. “It is to these odds and the inde-
pendence of his fortune I have to oppose my exertion for
the tranquillity of this colony, the welfare of the public
service, and my own reputation.”

But Governor King’s exertions against the rum traffic
grew very spasmodic while McArthur was away. The
Governor-General of India, at his request, checked the
sending of Bengal rum. Warnings sent by the American
minister in London to British consuls in the United States
had less effect. The Yankees were old hands at smuggling,
especially with rum. Much still came from Britain. King

^ He made the voyage via India, and the ship, dismasted by a “willy-
willy” off the N.W. of Australia, took refuge at Amboyna. For an incident
which happened there, delightfully characteristic of the pugnacious
McArthur, see Macarthur Records, p. 62.

A CONFLICT OF EVILS

sent away several cargoes, mostly of American or Indian
origin, but his enforcement of the limit of 300 gallons
which might be landed from any one vessel was never
strict. ‘‘So great was the fame of the propensity of the
inhabitants of this colony to the immoderate use of spirits
and the certainty of getting any amount of payment in
government bills’’, he complained to Portland, ‘‘that I
believe all the nations of the earth agreed to inundate the
colony with spirits.”

Between September 1800 and October 1802, 37,891
gallons of spirits and 22,932 gallons of wine were sent
away, but by his own account 69,980 gallons of spirits
and 33,246 gallons of wine were landed, an annual con-
sumption of five gallons three quarts of “rum” and two
gallons three quarts of wine to every man, woman and
child in the colony’s average population of 5807 during
that period. Though not an abstemious person, the average
Australian of 1925-6 consumed less than two quarts of
spirits (*44 of a gallon) and just two quarts of wine, in-
cluding both imported and local liquors. He drank, it is
true, 1 1*34 gallons of beer — quite another matter. By that
alternative King was anxious to slake his subjects’ thirst.
Hop-plants were sent out in 1802 at Sir Joseph Banks’
instance and brewing utensils followed. A brewery was
duly started at Parramatta in May 1804. Simultaneously
King laid a duty of a hundred gallons on imported
rum. Neither beer nor duty made any difference. The
Governor himself still used rum as an official reward for
the apprehension of criminals who had “gone bush”.

Some odds and ends of metallic money scraped together
during the period of the Napoleonic Wars were quite
inadequate to displace rum from its general acceptance
as a medium of trade. A thousand pounds of English
silver had been sent to Phillip to pay marine artificers
at work on ship-repairing. In 1801 this silver was supple-
mented by £2^00 in “cart-wheel” pennies, clumsy ounce-
weight things that went for twopence in the colony. They

A CONFLICT OF EVILS

were good payment for debts up to but the weight of
them in such mass, and the Governor’s refusal to take them
at colonial value in payment for bills on London, marred
their favour. Ships refitting in the harbour brought in all
manner of strange coins — Johannas, ducats, gold mohurs,
pagodas, Spanish dollars, rupees and guelders — ^but
often both these and the British shillings were absorbed
in paying vessels for imported stores when bills on London
happened to be short. Rum, however, was always to be
had. A little cozening would induce a settler to take it
for his produce or as change when he “cashed” the com-
missary’s receipt. Such receipts were then convertible into
bills on London, the external currency that paid for im-
ports, and more rum.

King continued Hunter’s plan of retailing stores to the
settlers, over and above the issue of free rations to con-
victs. This kept scfme out of the clutches of the rum-dealers
and restrained the rate of profit at which private traders
could sell imported goods. But the dishonesty of his under-
lings and the propensity of settlers to set up shop with the
cheap government wares forced him to hedge with pre-
cautions the right to buy. First both Governor and Com-
missary scrutinized the list of the settler’s wants. Then
each customer was admitted singly to the warehouse in a
loft, up a ladder at which a sentry mounted guard. For
all that, the trade involved in retailing King’s Sydney
purchases of ships’ cargoes and the consignments made by
the Victualling Board encouraged independent merchants
to take a hand in breaking the ring. First of these was
one Robert Campbell. After acting as Sydney agent to
a Calcutta firm that sold cattle, sugar and spirits, he
started business on his own account in King’s term of office.

The increase of goods due to the reduction of settlers’
costs meant the production of more grain, and this aug-
mented the settler’s power to buy. Grain was thus occas-
ionally in excess supply, but more often floods created
dearth and the Governor found a great vacillation in the

A CONFLICT OF EVILS

readiness of settlers to deliver their grain at the fixed
price.^ At first he ascribed this new trouble to McArthur’s
usual ‘‘art, cunning and impudence”, and argued stiffly
“that neither scarcity or plenty should influence the price”
(8 November i8oi).

Towards the end of his term King grew weary of the
isolation in which every attempt at active rule involved
him. Every move to regulate trade offended some interest
and drew the fire of anonymous critics. Their “pipes”
founded a species of lampooning journalism that still
grows rank in Australia.^ One represented King as
anxious, on hearing that “Pitt and Portland were out”,
to feather his nest by every means while still in power.
The convicts I’ll starve and sell all their rations
As well as their slops for my private occasions.

From the orphan collection I take what I dare.

Of whalers’ investments I own I’ve a share.

He met such attacks sensibly by starting in 1803 the
Sydney Gazette^ but he was by then heartily sick of the too
vast orb of his fate. In May he applied for leave to vacate
the office he had once eagerly sought. Three years he
waited impatiently for relief. The successor who arrived
in August 1806 was a protegd of Banks, Captain William
Bligh, who had seen service under both Cook and Nelson,
and had won fame as “Breadfruit Bligh” of the ‘Bounty’.
To Banks he seemed a man of “integrity unimpeached,
a mind capable of providing its own resources in diffi-
culties, civil in deportment, and not subject to whimper
and whine when severity of discipline is wanted to meet
emergencies”.

Bligh found at his coming a community sunk deep in
depravity, whose most hopeful element, the farmers along
the Hawkesbury, had just been impoverished by a recur-
rence of the floods. His task, as he saw it, was to revive

^ For an account of the floods prior to 1806, see H.R. of A, series i, vol. v,
p. 697, King to Camden, 7 April 1806.

* See Australian Encyclopaedia, vol. ii, p. 301, article on “Pipes”. Gf.
The Adventures of Ralph Rashleigh, pp. 86-7.

A CONFLICT OF EVILS

agriculture, to build churches and schools and to amend
by instruction the moral and spiritual shortcomings of his
people. Most of the rising generation were entirely
neglected, having no parents, “the mothers being dead,
and their fathers having left the country as either sailors,
soldiers or prisoners who became free”.^ Neither by word
nor deed, however, did he exhibit a leader’s power to
transfofm his charges into a self-reliant society of families
shaping their lives by a free exchange of services. His
main instructions, repeating once more those given twenty
years earlier to Phillip, still ordered him to create by
prisoners’ labour a public fund of foodstuffs, to be issued
by authority. As a means of recovering from the recent
disaster such communal subsistence-farming was hopeless.
As a check on the speculative and fluctuating prices asked
outside the store^^by private cultivators it was no better.
Since the institution of assigned service, public farming was
perforce conducted at a high cost with convicts whom no
private employer would take.

In his additional instructions to Bligh, however, Castle-
reagh had recommended the activity of free producers
selling for an open market as the most hopeful chance of
reducing dependence on England. Wheat and maize, ex-
cept when floods swept away the harvest, were coming
forward in ample supply. Gastlereagh looked for live stock
from the same source. In good set terms he propounded
the new doctrine of freedom of enterprize. “Nothing, I
conceive, will more essentially contribute to bring forward
the supplies which the country is becoming able to furnish
in most of the Articles of first necessity such as Corn,
Poultry, Vegetables etc., than the abolition of all restric-
tions in the disposal of those supplies. In like manner it is
not judged necessary for you to interfere in future in

1 Bligh to Windham, 7 February 1807, H. R. of A. ser. i, vol. vi, p. 123.
The weakness in early New South Wales family life may be judged from this
short paragraph in the same despatch. “The inhabitants are healthy and
Marriages increase; in my late Surveys I ascertained the Married Women
were 395; Legitimate children 807; Natural children 1025.’*

A CONFLICT OF EVILS

respect to the demands of Adventurers bringing articles
for trade to the Colony, further than to prevent improper
communications between the ships and the convicts, ex-
cepting with regard to the Article of Spirits/’

Bligh awaited the opportunity of an abundant harvest
before abolishing the fixed official price of wheat. ^ He
had hopes that the scarcity he found at his arrival
would more effectively than any admonition “teach the
settlers to be more provident and industrious”. “Con-
siderable importation”, he reasoned, “would lead to great
indifference, as it would reduce the price of grain and
make it not worth their while to grow it.” In this he was
more considerate than his successor, whose importations
were to produce precisely that depressing effect.^ “When
they begin to find a regular market for their grain”, con-
cluded Bligh, “agriculture will be the chief pursuit both
here and at the out-settlements.” But in taking the role
of patron of agriculture, Bligh was moved by other motives
than those of economic reason.

The exception to the rule of laissez faire which Castle-
reagh had noted — Bligh’s duty to interfere “with regard
to the Article of Spirits” — loomed larger to the new
Governor than the rule itself. Here was a trade in which
his charges wretchedly sacrificed their produce to the en-
richment of an already wealthy few. He had been sent
to repress it. His arch-antagonist in this duty had earned
the displeasure of Sir Joseph Banks. Bligh’s view of ail
John McArthur’s energies in the colony was distorted by
his determination to overthrow one who had baulked both
Hunter and King. McArthur, we can now see, stood head
and shoulders above his fellow-colonists in economic fore-
sight as well as in money-making. When Governor Phillip

^ This was 55. per bushel in 1790, lo^. from 1791 to 1800, 8j. until 1804,
75. at the Hawkesbury, 75. %d. at Sydney from 1804 to 1806, 155. in 1806
and 10s, a bushel until 1822. See Goghlan, Labour and Industry in Australia,
vol. I, pp. 142 and 277.

® See Marion Phillips, A Colonial Autocracy, p. 12 1, for the fluctuations
of prices and their reactions on production in 1813 and 1814.

42 A CONFLICT OF EVILS

was hoping to find out how soon an expiree could be
induced by the hope of independence to grow enough food
for himself and his family, McArthur had proposed to use
those ‘‘basilisk’’ eyes of his to keep a whole gang of con-
victs “hard at it”, producing by their combined labour
a surplus that would feed the colony and make him rich.
When under Grose this plan was being tried, he foresaw
that the» home authorities would soon complain of the
expense of feeding the assigned servants. He was therefore
the first to offer to feed a hundred himself, and to press
on Hunter a plan to render the colony self-supporting in
animal food by distributing pigs among the better con-
victs. As soon as success in raising grain and animal food
by private activity came in sight, his mind ranged in
search of a way by which the colonists might pay for their
needs from abroad. What could they export which, unlike
the whale-oil and'^^eal-skins already being won on the
coast, would be permanent and expansive in supply, and
secure against unthrifty exploitation by intruders? This
forward-moving quality of his mind was of invaluable
service to Australia in the end, but in his haste to reach
each fresh objective, McArthur was ready to clutch every
resource of his fellow-colonists which was legally within
his reach, and with such weapons to fight relentlessly for
more.

Neither opponent, indeed, was restrained by a conscience
sensitive to the social consequences of his actions. Whatever
Bligh’s character may have been when in command of the
ill-fated ‘Bounty’, his use of authority in New South Wales
was often capricious and at times precipitate.^ His main
duty, as he saw it, was to restrain McArthur’s traffic in
spirits. Yet his first acts in the colony were hopelessly at
variance with the role of stern rebuker of greed in high
places. Before assuming office, he accepted from Governor
King three grants of valuable land at Sydney, at Parra-

^ Sec Macquarie to Gastlcreagh, lo May i^iOy H, R, of A. series i, vol. vii,
P- 331-

A CONFLICT OF EVILS

matta and at Rouse Hill, amounting in all to 1 345 acres ;
and the first grant he made was to his predecessor’s wife, a
grant of 790 acres in the district of Evan, to be known by the
curious name of “Thanks”. Local manners and customs,
he wrote in November 1806, called for much correction.
“The settlers in general, and particularly those from
prisoners, are not honest, have no prudence and little
industry; great chicanery is used in all their dealings, and
much litigation. All this will require a great deal of
attention on my part to remove.”

He proceeded to question the validity of certain leases
for fourteen years within the boundaries of Sydney. Phillip
had set a limit of five years to such leases and King had
confirmed this. At the end of his term, however. King
had granted fourteen-year leases to McArthur, Johnston,
Blaxcell and others. Farther afield, Bligh boggled at
McArthur’s grant in the Cowpastures beyond the Nepean,
made by Lord Camden despite opposition from Sir Joseph
Banks. Though McArthur’s cult of fine wool had won
many friends at home, Bligh threw cold water on it at
every opportunity. On the farm he bought at Pitt Town
on the Hawkesbury, he set an example of dairying and
agriculture. His despatches made light of an export of
wool. “In general, animal food is a greater object to the
proprietors of sheep than the fleece, as there is an imme-
diate demand for it.” And again “Some wrong impres-
sions were made in England by reports of the exportation
(of wool) expected from this country. Some of the ships
which arrived about the time I did had orders to pur-
chase what was ready, but they found none for sale.”
When McArthur urged the superiority of his “peaceful
productive sheep” over the herds of wild cattle — “fine
animals” Bligh had called them — with whose tide and
possession of the Cowpastures the Governor was most
sympathetic, Bligh burst into rage. “What have I to do
with your sheep. Sir? Are you to have such flocks of
sheep as no man ever heard of before? No, Sir!”

A CONFLICT OF EVILS

Yet the agriculture which Bligh favoured could at best
only relieve the British Treasury of the cost of transporting
provisions to New South Wales. The foodstuffs grown there
must still be purchased before their issue as government
rations. That demand, moreover, was limited and in-
elastic. In days of war, corn laws and slow transport, a
big export trade in wheat, livestock or maize was incon-
ceivable. The limit of Bligh’s view in public economy was
thus to save the cost and necessity of transporting salt-
meat and flour from overseas. His express instructions and
his naval training alike led him to rate higher than
economic aims the disciplinary task — restraint on the use
of spirits as barter. Was it not as a fearless disciplinarian
that Banks had recommended him, at a doubled salary?

No evil, he thought, had resulted from the consumption
of spirits. The trouble arose from the pull in hiring labour
which their moiio^bly in importation had given to officers
and big settlers, to the disadvantage of the small farmers.
‘‘To prohibit the barter being carried on in any way is
absolutely necessary to bring labour to a due value and
to support the farming interest.’* As examples of the
effects of payment in rum, he cited: “A sawyer will cut
one hundred feet of timber for a Bottle of Spirits — value
two shillings and sixpence — which he drinks in a few
hours. For the same labour he would charge two Bushels
of Wheat, which would furnish Bread for him for two
months. Hence those who have got no liquor to pay their
Labourers with are ruined by paying more than they can
possibly afford for any kind of labour which they are com-
pelled to hire men to execute, while those who have liquor
gain an immense advantage.”

Bligh’s conception of reform was a direct prohibition of
the use of spirits as a means of purchase, coupled with police
measures against private distillation.^ Such measures, he
knew, would provoke opposition from those who had

^ Regarding the character and remuneration of these convict and ex-
convict police, see M. Phillips, op. cit. pp. 77-8.

A CONFLICT OF EVILS

“so materially enriched themselves by” the trade. In
social and official influence they were strongly entrenched,
and he had the poorest opinion of the judge-advocate on
whose legal decisions he must rely. “Mr Atkins the
Judge-Advocate”, he reported in October 1807, “has
been accustomed to inebriety; has been the ridicule of the
community; sentences of death have been pronounced
in moments of intoxication; his determination is weak; his
opinion floating and infirm; his knowledge of the Law
insignificant and subservient to private inclination. Con-
fidential cases of the Crown where due secrecy is required
he is not to be trusted with.” He advocated his removal
in the strongest terms.

The stage was thus set and the chief characters cast for
what the Sydney populace dubbed “The Rum Puncheon
Rebellion” — Bligh’s deposition by the New South Wales
Corps on the twentieth anniversary of the colony’s founda-
tion, 26 January 1808. On one side a Governor blinded
by prejudice to the ability of the little community’s only
first-class brain; on the other a group of officer-traders
whom McArthur himself despised. “A more improper set
of men”, he told his wife, “could not be collected to-
gether”.^ As traders they drew their wealth mainly from
a traffic which sapped the efforts of convict-settlers to make
a new start by honest toil. Over their doings watched a
court of law in which justice spoke by the whims of one
despised as a drunkard even in that company.

On New Years’ Day 1808 the small settlers and “emanci-
pists”, to the number of 833, petitioned Governor Bligh
in the name of “the extensive rising greatness and enter-
prising spirit of the colonists” for “such privilege of trade
to their Country vessels and themselves as other colonists
have, and that the Law might be administered by Trial
by Jury of the People as in England”. Castlereagh's
additional instructions clearly empowered Bligh to lend
a favourable hearing to the former request. But the older
^ 3 May 1810, H, R, of jV. S. Wales, vol. vii, p. 370.

46 A CONFLICT OF EVILS

instructions which had been repeated to Bligh bade him
prevent by all possible means every sort of intercourse
between New South Wales and European settlements in
India, China and the Pacific. Only by licence from the
East India Company could English vessels trade in longi-
tudes east of the Cape of Good Hope. The officer-capitalists
of Sydney, long accustomed to pull the strings and to
exploit these special licences to their private advantage,
sniffed the tainted breeze when emancipist petitioners
asked for a general freedom of trade. Bligh, they knew
full well, meant to upset their system. It was high time
they captured, in defence of their privileges, the whole
machinery of government. The episodes of McArthur’s
stills and of the seizure of the Parramatta” were therefore
welcome opportunities to men already strongly tempted to
grasp for their own ends the Governor’s powers to bind
and loose.^

The liberty for which they struck consisted in the privi-
leges of a dominant few, but when they had grasped power
and imprisoned ‘‘the Tyrant” the usurpers fell out among
themselves.^ McArthur, taking the official style of Secre-
tary to the Colony, was soon involved in a furious contest
with the Blaxlands and Simeon Lord, a wealthy emancipist,
about the control of a sealing vessel, ‘The Brothers’. This
culminated in further interference by the military in the
course of justice in the courts. So formidable was the
danger of chaos through these feuds, that in April, Major
Johnston, the rebel Lieutenant-Governor, addressed to his
fellow-conspirators a stern letter of rebuke, reminding
them of their pledged words to support him in assuming
the Government. He challenged any to aver that McArthur
had not fulfilled his share of that solemn engagement.
Such an appeal, backed by a challenge from two men who

^ As to the operation of the restrictions arising out of the East India
Company’s charter see M. Phillips, op. cit. pp. i6, 153; T. A. Coghlan,
cp. cit. pp. 124, 138; and H. R. o^A. scries i, vol. x, p. 809 et passim.

* For an account of the mutiny, see Ernest Scott’s Short History of Australia,
pp. 69-74.

A CONFLICT OF EVILS

meant what they said, went home. A revived sense of
common responsibility curbed the feuds.

As time brought reflection on their position, however,
financial apprehension made the rebel leaders cautious.
How were the expenses of government to be met? If they
drew bills on the Treasury and these were rejected, their
signatures would put their private fortunes in jeopardy;
and they had private fortunes. So they proceeded to meet
current expenditure by selling the government herds and
stores.^ They did more. As under Grose and Paterson
in 1793-5, so again under Johnston, Foveaux and Paterson
the main activity of the military government was the
granting of land and stock, the customary first capital for
development.^ Their proceedings, reported by Bhgh’s ad-
herents, with no loss of unfavourable colour, did more to
enlighten His Majesty’s Ministers as to the folly of main-
taining a standing garrison in such an environment than
all the despatches of Governors fearful to confess their own
impotence.

The “Rebellion”, if the metaphor may be allowed, was
a boil in an unhealthy body in which certain useless
elements came into a conflict of mutual destruction which
could be ended only by the surgeon’s knife. It rid the
colony of the New South Wales Corps and, for a time, of
its ex-member but continued leader, John McArthur. It
rid it, too, of naval governors and their habit of trying to
order social and economic relations by the methods of the
quarter-deck.

^ Hence Major Abbott’s laconic report to ex-Governor King, 4 September
1808: ‘‘The Colony is quiet. There is no money.” Bills on London were
then the only external currency for large amounts. H. R. of NSM, vol. vi,

p- 835-

* Palmer to Bligh, 4 November 1808, H, R, of A, series i, vol. vi, p. 686:
“Macarthur and Fitz has the chief management of Stock returns, as well
as the Grain, and two such adepts in Villainy, they could not be in better
hands.” Also vol. vii, p. 108,

CHAPTER IV

“Governor Macquarie’s Bank”

COLONEL Lachlan Macquarie, Governor-in-Chief
of New South Wales and its Dependencies from
I January 1 8 1 o to i December 1821, has been highly
praised.^ At a time when many were turning against him,
his zeal and belief in the colony won this comment from
his shrewdest contemporary: “Governor Macquarie is a
man of unblemished honour and character, although it
may not have been his lot to do that which I think no
man ever will die?— to give satisfaction to all’’.^ His
modern biographer, however, sums him up as “a man
of very ordinary ability”^ and an official historian half
complains that he “left the development of the colony’s
primary industries and the pioneer experimental work to
individuals undirected by the fostering care of govern-
ment”.^ This he had been instructed to do. Yet, judging
by his ideal of an emancipists’ Utopia and his vendetta
against free settlers, his forbearance sprang less from a
thorough appreciation of his instructions than from “total
incapacity”® to assess what the pastoral leaders could
achieve. A splendid second-rater, he perceived things and
hated opponents but could not judge the creative value of
ideas.

Castlereagh’s instructions plainly envisaged a colony

^ As recent examples see (i) T. Dunbabin’s Making of Australasia^ p. 89,
“Macquarie the Nation-Builder”, “Second founder of Australia”; and
(2) A. Jose’s Builders and Pioneers of Australia^ pp. 3-35.

* John McArthur. See Macarthur Records, p. 290. The opinion was ex-
pressed early in 1817.

® Marion Phillips, A Colonial Autocracy, Preface, p. vii.

* F. G. Watson, H. R. of A, series i, vol. viii. Introduction, p. xvi.

® The phrase is J. T. Bigge’s, Macarthur Records, p. 324.

‘‘GOVERNOR MACQUARIE’S BANK” 49

developing its own economy.^ There was to be an end
of naval paternalism over all residents in the prison
marooned on a distant shore. Fixed prices, government
trading and public agriculture were to go. Macquarie
furthered the new policy by providing a bank to keep the
currency sound and by building roads to the wider hinter-
land which the pastoralists had spied out beyond the
mountains. But much remained, notably in transportation
and the Navigation Acts, of an older system which had
treated all colonies as distant depots tied to British trade,
and the strong wine of despotic power let loose the High-
land chieftain latent in Macquarie.

His first task was the unsolved riddle of rum. As his
public works pay-sheets bear witness, it was still in use to
pay wages. George Street between Brickfield Hill and
Bridge Street cost four hundred gallons. Prompted by
Castlereagh, Macquarie recommended the admission of all
rum sent to New South Wales on payment of“ high ’’duties,
say three or four shillings a gallon. The home govern-
ment, then contemplating a British duty of £1. 12s. 6d,
a gallon, at once chose the higher figure. It also informed
the East India CompsSiy, still in charge of licensing traders
and whalers in the South Seas, that any who traded to
“the colony of Botany Bay” might be allowed to carry
spirits thither “for the consumption of the inhabitants of
the said colony”. Macquarie thought to take strict control
over this consumption by cutting down licensed houses in
Sydney from 85 to 20, and at the out-settlements in due
proportion.

Like King he was caught by a return wave which en-
gulfed every impediment. Official cancellation of licences,
made little difference to the sale of rum in “The Rocks”
area, near the wharves. Macquarie granted fifty beer-
licences and took the administration of all licensing orders
out of the magistrates’ hands, but the standards he required
of their holders proved to be such that one trader was

^ H. R. of A. scries i, vol. vn, pp. 80 and 83.

50 “GOVERNOR MACQUARIE’S BANK”

granted a licence who had been convicted of unlicensed
vending four times in the two preceding years.

Nor were the wholesalers less adroit in finding the
Governor’s blind spot. Early in i8ii ministers at home
were astonished to learn that Macquarie had granted a
legal monopoly in the importation of spirits, other than
on government account, to three men — Blaxcell, Riley and
D’Arcy^ Wentworth! Blaxcell and Riley were typical
speculative traders, but Wentworth, though by voluntary
exile he had narrowly escaped transportation on a charge of
highway robbery, was now Principal Surgeon and Super-
intendent of Police. He was taken into partnership by the
other two during the negotiation of the contract. The three
undertook to erect a large general hospital, including
excellent surgeons’ quarters, at no cost to the government
other than (i) the grant to them of the sole right to import
spirits for three -years up to 45,000 gallons and (ii) the
services of 20 assigned servants and 80 oxen. The Governor’s
enthusiasm for fine buildings (of which more anon) must
have blinded him temporarily to the inconsistency of this
monopoly with the policy of open imports subject to
duty, and to the impropriety of making the Principal
Surgeon and Superintendent of Police, with his repute as
a retired highwayman, a partner in profits from the lavish
sale of rum and the cheap erection of the hospital. Tem-
porary blindness or no, when the Governor permitted
breaches of this contract the partners exacted from him
two extensions of the term of their monopoly. The “Rum
Hospital” was duly built. Part of it still stands in the
fagade of Parliament House, hallowed to the legislators
of to-day by the traditions of Wentworth junior, Robertson,
Parkes, Dailey and Reid.

The four years of its building were an Indian summer
to the rum-monopolists. Ruefully Hannibal McArthur
reported to his Uncle John in England how they were
making hay. Whereas he (Hannibal) had been forced under
the terms of the monopoly to sell a consignment of spirits

•‘GOVERNOR MACQUARIE’S BANK” 51

to government at 9^, a gallon, duty free, these contractors,
after paying a duty of 3^. a gallon, were getting 365. for theirs.
Licensed houses increased more than threefold, and all
complaints of disorder in them met with the cynical con-
tention from Wentworth senior that the thriving trade
meant good revenue for the police fund. Judging from
the total of 144,000 gallons imported during the four
years, a third of which may have been on government
account, the monopoly imported more than was allowed
in the original bond.

Earl Bathurst peremptorily ordered Macquarie to set
importation free at the expiry of the contract, to raise the
duty, and to put an end to the issue of rum at a fixed
price to officials and military, “a practice which even
under your Prudent Administration of it has the Appear-
ance if not the actual Effect of encouraging the Barter
of that Article”. The contrite Governor raised the duty
to seven shillings a gallon, and in 1818 to ten shillings.

Reduced consumption did not speedily follow the substi-
tution of duties by no means severe for legal prohibition of
import. Consumption during the Hospital Contract seems
to have been about three gallons two quarts per head of
population. From 1815 to 1820 it actually rose to over
four gallons a head, apart from smuggling, illicit stills and
beer. In England, though the consumption of spirits rose
during the wars, the quantity drunk per head was in 1830
less than a gallon.

The provision of sound money and a central control of
credit proved a more effective antidote. Governor King
had dreamed of coin as an antidote to rum as early as
November 1800. He proclaimed the approaching end of
barter “when a sufficient quantity of copper coin is re-
ceived in the colony’*. But the cart-wheel pennies were
local tokens only. In December 1804 a British whaler,
the ‘Policy’, captured near Amboyna a Dutch supply
ship with fifteen chests of dollars aboard, worth ^^20,000.
This was good silver money acceptable anywhere — a fact

52 “GOVERNOR MAGQUARIE^S BANK’’

which disquieted the master of the ‘Policy’ who brought
his prize into Port Jackson. He asked King to buy the
silver and pay him in bills on London, a safer booty to
carry on the open sea in time of war. King declined “so
mighty a responsibility”. He had apparent reason for his
caution. Sealskins were, as he said, “the only staple yet
discovered here”, and, in the absence of exports, the more
good money put into circulation the sooner was it drained
out to pay for visiting traders’ goods. So disappeared those
of the ‘Policy’s’ dollars that its master and crew spent in
Sydney. Not even the cutting of the Spanish dollars into
eight or ten parts kept them in circulation.^

Ministers at home were too much absorbed in war-finance,
currency depreciation and “scarcity of specie” to pay
heed to the monetary troubles of an obscure colony on
the Pacific. Yet the principle of laissezfaire^ which Castle-
reagh enunciated lor Macquarie’s guidance, presupposed
an honest and stable medium of exchange. In their search
for a money less difficult to carry than rum or copper
pence the colonists had already taken to issuing private
“notes” or “cards”, which circulated as “colonial cur-
rencyA settler wishing to buy goods from a private
trader tendered the receipt the Commissary had given
him for his pigs and grain, and instead of taking out the
change in rum, carried away an I.O.U. from the trader.
Possibly the first issuers were the more reputable traders.
To most ex-convict shopkeepers every settler was “fair
game” and his store-receipt showed what he was worth
to rob. Such a trader would count himself a failure if the
whole amount were not promptly “melted down”, i.e.
taken in rum. Thus private notes may once have been
prima facie evidence of a self-restraint akin to honesty.

^ Spanish dollars were minted freely at Mexico City from 1535 and had
become an excellent international cash in use from Maine to India. Little
sterling silver was minted in Britain during the first half of George I IPs
reign.

* Hence the mildly contemptuous terms “currency lad” and “currency
lass” for children born in the colony.

“GOVERNOR MACQUARIE’S BANK” 53

Soon they varied as much in value as in style, or more.
Some were in writing; others promised in impressive
copper-plate future payment in sterling for value received.
One group of leading firms tried printing in hot type as
a precaution against old Sydney’s expert penmen. With
every precaution taken, however, such “petty banking”,
as Macquarie dubbed it, left open by its very nature “a
door to grievous frauds and impositions”. Traders who
were still convicts on ticket-of-leave managed by free issue
of currency notes to get hold of many commissariat re-
ceipts and to change these into substantial property, in
goods or land. Then, declaring themselves insolvent, they
would employ confederates to buy up their notes from
their defrauded creditors, at a heavy discount. Apart
altogether from such deliberate fraud, the general issue
of colonial currency caused all its units to depreciate.^
Governors strove in vain to limit to approved persons the
right to issue “notes”. Who was to draw the line and — a
task still more difficult — to maintain it when it had been
drawn? “Strong personal laws” ordering redemption in
specie did no more under Bligh and Macquarie to stop
fraudulent “currency” than they had done under King
and Bligh to check the excess of rum. A spate of imports
in 1812 made silver so scarce that in January 1813 it was
at a premium of 75 per cent.^

At his first coming. Governor Macquarie advocated the
institution of a bank for the provision of notes secured
against land.^ His advocacy of a plan avowedly derived
“from the famous Bank of Pennsylvania ” and promising
a result “Eleven per cent, above what the Exchequer Bills

^ For Macquarie’s first impressions of colonial currency, see H. R. of A.
series i, vol. vii, p. 264, Macquarie to Gastlereagh, 30 April 1810.

“ Sydney Gazette ^ 27 January 1813. “A difference of 15^. in the pound
has been the present week demanded and no article laid in at the market
price of the day can afford the difference.”

* H. R, of A. series i, vol. vn, p. 265, Macquarie to Gastlereagh, 30 April
1810. His Secretary, J. T. Gampbell, had been in the service of the Bank
of Ireland and had “had a principal part in the establishment and conduct
of the Bank at the Gape of Good Hope”.

54 “GOVERNOR MACQUARIE’S BANK”

yield in England” must have read like a lesson to the
Old Lady of Threadneedle Street in sucking eggs. The
Board of Trade, to which Lord Liverpool referred the
proposal, would have none of it. New South Wales was
a very different place from the Cape of Good Hope. The
Board suggested that its Governor be sent 10,000 in
dollars, through the East India Company. They arrived
by the sloop ‘ Samarang ’ in November 1812, and Macquarie
solved the problem of keeping them in circulation by
punching a large hole in each, giving the ring or “holey
dollar” an oflBicial value of five shillings, and the dump
one of fifteen pence. As bullion the dollar was then worth
five shillings for oversea trading. The government under-
took to redeem “holey dollars” and dumps at the end of
every two years by giving for them good bills on London.
Thus they formed a^local token currency, being in effect
metallic promises to pay. But the supply was inelastic, and
the way still remained open for creations of private “cur-
rency”. Those who had no occasion to make payments to
oversea traders passed on the depreciated notes.

By the Sydney Gazette the Governor warned issuers of
currency that their safety and advantage lay in giving out
no more. The main burden of a local money issued in
excess fell upon dealers who had to pay importing mer-
chants in sterling yet must sell their wares at retail for
the depreciating currency. But, plain as the collective
interest of the traders might be in calling a halt, the
temptation upon each individual remained. So many tried
to outrun the general disaster that the depreciation of
“currency” was accelerated.

Only a Bank with exclusive right to issue could maintain
the value of paper money at a par with specie and keep
trade on credit sound. Unlimited credit means unlimited
belief, an imprudent attitude in any community. In 1816
Macquarie succeeded in calling a halt to the unscrupulous.
A firesh consignment of 40,000 silver dollars from India
enabled him as a first step to re-enact Bligh’s order that

“GOVERNOR MACQUARIE’S BANK” 55

notes were to be redeemable at demand in sterling, then
understood as including all specie. Prices and wages, too,
were to be stated in sterling. But how was redemption
to be made customary and easy? A general meeting of
traders agreed early in 1817 that all contracts in existence
were to be re-adjusted, two-thirds prices in sterling being
substituted for those quoted in “currency”. So much for
past contracts. But who was to sustain for the future the
collective interest in the equivalence of paper money and
specie, of credit and international cash? Public meetings
agree, resolve, dissolve and disagree. The responsibility for
restraint in the issue of paper currency was placed and
shouldered only when it was announced that a group of
leading traders and officials had been granted a charter
to form a bank.^

The capital of the contemplated Bank of New South
Wales, gathered in the form of 200 shares of £100 each,
was to be charged with the redemption on demand of all
notes which the bank deemed it prudent to issue. Over-
issue would thus endanger the bank’s foundation, its stock
of international cash. In issuing notes or otherwise
granting the right to draw cash from its strong-box, the
directors of the Bank were in this way made the colony’s
financial watchmen. They would hurt themselves first if
they granted credit, the use of productive resources on
condition of future repayment, to men unable or unready
to put those resources to effective use. The bankers became
in a sense the trustees of their clients’ wealth and the
guarantors of their honesty. They encouraged trade be-
tween the most dependable, and were bound by the special
circumstances of the colony to pay good heed to its
external trade.

In March 1817 the need for such a regulator of note
issues had grown so clear that Macquarie, with the
cautiously worded support of Judge- Advocate Wylde,
granted a Colonial Subscription Bank a seven-years’

^ H, R, of A, scries i, vol. ix, pp. 217 stq*

56 “GOVERNOR MACQUARIE’S BANK”

charter on his own initiative. He advised the Colonial
Office not merely to confirm the charter but to become
party to the subscription of capital, only ,^12,600 of which
had been found in the colony. Government, he urged,
“should at least make the Bank the Depository and
Medium of all Government Monies and payments”.

Though the Governor’s secretary became its first Presi-
dent and deposits flowed in steadily^, the paid-up capital
at opening day was but ;^3625, and troubles soon came
upon “my favourite Measure”, as Macquarie termed it.
The Colonial Office reported the opinion of the Crown’s
legal advisers “that you were not legally empowered either
by your Commission or Instructions to grant such a
Charter, and that it is consequently null and void”.®
Holding that no good purpose could be served by any
“interference” in banking on the part of government, the
Secretary of State ordered Macquarie to “intimate to the
gentlemen composing that establishment that they can
only consider themselves in the situacion of persons asso-
ciated for the purposes of trade, and as such not entitled
to any of those special privileges which it was the object
of the Charter to confer”.

Foremost of these was the privilege of indemnity
“against all risk or liability beyond the amount of the
Shares respectively taken by each in the Capital Stock of
the said Bank”. Among banks ofissue such limited liability
was then the exclusive privilege of the Bank of England.
In its absence the subscribers would become ordinary
partners liable to an unlimited extent for the debts of the
bank. Macquarie had hoped that the privilege of limited
liability would induce the sound and cautious to subscribe
adequate capital. A new currency chaos, he foresaw,
would follow the denial of the charter’s validity, and he

* The first depositor was Sergeant Jeremiah Murphey of the 46th
Regiment, £50, the second John Harris of Ultimo, XniB. ts. Ad., and the
third William Redfern, £51. 15J. "jd.

* Bathurst to Macquarie, 29 October 1818, H. R, of A, series i, vol. ix,
p. 840.

“GOVERNOR MACQUARIE’S BANK” 57

fought with success, though in a somewhat disingenuous
fashion, against the dissolution of his Bank. Possibly his
reply to Bathurst was written promptly, but it was not
sent until i September 1820. The Bank, it then announced,
had succeeded beyond his most sanguine hopes. Its dis-
solution “would be attended with the most embarrassing
circumstances to every member of the community”. “So
great a number of proprietors”, he believed, “could not
be legally united together otherwise than by a Charter
of Incorporation”.^ In the dilemma of “venturing on the
suspension of your Lordship’s instructions” or producing
“little short of a General Bankruptcy” by giving effect
and publicity to them, he “ventured to take the weighty
responsibility of embracing the former Alternative”.
Wherefore he asked for “direct sanction to his measures
for the unexpired portion of the Original Charter of Seven
Years”. He did not get it; the question was referred to
Commissioner J. T. Bigge, then conducting a general
inquiry into the colony’s affairs. In Bigge’s report of 1823^
a conflict is evident between accomplished facts in Sydney
and Whitehall’s new dogma of laissez faire^ forbidding all
legal privilege save to the Bank of England. Bigge bore
testimony to the utility of the Bank in evolving order out
of the commercial chaos of paper based on the honesty
of individuals, and to the high credit it enjoyed. This had
survived the loss of half the subscribed capital [£i2fioo)
through defalcations by its chief cashier, discovered in
January 1821. That credit, he thought, had grown in part
from the belief in its possession of a royal charter, but as

^ The right of “exclusive banking” granted to the Bank of England by
the Act of 1697 and further defined by that of 1742 was interpreted as
banking through the issue of notes “payable on demand or at any less time
than six months from the borrowing thereof”. No partnership of more
than six persons could lawfully carry on such business “in that part of
Great Britain called England”. Macquarie seems to have been advised
that he could do nothing repugnant to the laws of England, and was there-
fore bound by this second rule. See H, R. of A. series r, vol. x, p. 351.
Gf. A. Andreades, History of the Bank of England^ p. 171, note 2, and A. F.
Dunbar, Chapters on Theory and History of Bankings p. 195.

* J. T. Bigge’s Report on Agriculture and Trade y January 1823, pp. 65-7.

58 “GOVERNOR MACQUARIE’S BANK”

he could not be “insensible to the consequences of in-
sufficient control that a chartered immunity from the
ordinary risks of commercial partnership has a tendency
to produce”, he did not recommend the charter’s renewal.^
Yet in Brisbane’s statement of action taken on Bigge’s
reports appears the bald entry: ‘‘Relative to renewing the
Charter of Incorporation to the Sydney Bank after its
expiring |n the Year 1824: Charter renewed in 1824”.

Whatever its standing in the eyes of the law, the Bank
proved a vigorous custodian of the community’s financial
interests. It was an early example of the young society’s
power to create, independently of the state, organs for
collective action. The coins that passed over its counter
would have seemed to a modern teller fit only for a
museum. In 1821 the Bank’s clients were warned against
such illegal and counterfeit money as “Dollars and Dumps
which are not silver^J^^Dollars having the usual holes in the
centre but without the Colonial Stamp on them; Colonial
Dollars from which a portion of Silver has been taken
round the Centre; and Dollars that bear a counterfeit
Stamp, intending to imitate the Colonial one surrounding
the Hole in the centre, many of which may be detected by
the figures for the date of the year being transposed from
1813 to 3181 ”.2

It was not merely the opening given by imports of
Spanish dollars for such private issues of mutilated coin
which caused the Bank to take a strong line in advocating
a purely British currency. Governor Brisbane displayed
high enthusiasm for the Spanish dollar. To his scholarly
mind it was “an invaluable coin which has for centuries
been disseminating its benefits over every other portion of
the earth — a coin which from the extension of its circula-
tion over every part of the commercial globe may justly

1 J. T. Bigge, op. cit. p. 67.

® These descriptions will be made more intelligible by reference to an
engraving of the original issue of Holey Dollars and Dumps, e.g. in the
Australian Encyclopaedia, vol. i, p. 345, or in the View of Premises of the Bank
of New South Wales, 1907.

“GOVERNOR MACQUARIE’S BANK” 59

be defined the money of the world”. As Governor, he
answered the Bank’s dislike of the holey dollars by their
recall and re-issue at 3^. grf. But he admitted fresh dollars
in great quantities, about 400,000 in number, making
them legal tender at five shillings apiece. This official
rate of exchange was more than the bullion value of the
silver in them, and, as the colony’s trading prospects im-
proved, Spanish dollars were poured in to take advantage
of the local over- valuation. In May 1825 the rate at the
colonial treasury was lowered to 4s. 46?., and after Brisbane’s
departure in that year British silver was sent out in
adequate quantity. Holey dollars were finally redeemed
at 3^. 3^/., and the unmutilated dollar was accepted only
as so much bullion then worth 4^. 2d.

In these adjustments the Bank of New South Wales —
“Macquarie’s Bank”, as it was called in lively reminder
of his services in founding it — took a strong line in support
of its first aim and reason, stable money. It denounced
Brisbane’s use of Spanish coins in government payments
as a rejection of sterling cash payments in favour of a
currency of fluctuating value. Now that the British had
resumed specie payment on a gold monometallic basis, and
war-expedients and depreciation (1798-1821) were no
more, the Bank was right.^ The colony’s main trade being
with Britain, a stable relation, even identity, in the
standard money of the two countries was the first desi-
deratum, whatever benefits may have been conferred “on
the British and North American Colonies, on the French
and Papal Canadas, on Mahomedan India and on the
whole world” as scanned by the benevolent Brisbane.^

The same primary aim of sound currency was urged
by W. C. Wentworth in support of a reduction of the
discount rate in 1825 from 10 to 8 per cent., against a

^ For the memorials and correspondence which passed between the Bank
and Governor Brisbane in 1822, see H. R, of A. series i, vol. x, pp. 730-44.

* For two years, 1824 to 1826, the Bank issued notes in dollar denomina-
tions I, 3, 5, 10, 20, 50 and 100. They were withdrawn in 1826 in favour
of sterling notes for £iy £2, £5, £10 and £20.

6o “GOVERNOR MACQUARIE’S BANK’’

minority of bank shareholders greedy for maximum gain.
Out of this conflict arose the rival Bank of Australia to
which many leading officials and squatters adhered, such
as ex-President J. T. Campbell, John Oxley and John
McArthur. Their knowledge of the inner counsels of the
older bank and perhaps its record of independence explain
but hardly excuse the partisan line taken by Governor
Darling ^gainst the Bank of New South Wales. The suc-
cess of the old Bank and the growth of the wool trade were
attracting intending competitors from far and near. The
promoters of a third bank in Sydney announced that their
shareholding lists, in pointed reflection on the “pure
merinos” who founded the Bank of Australia, were to be
open to every free colonist. They were persuaded, how-
ever, to coalesce with the Bank of New South Wales by
the offer of additional shares in it. While the terms were
under discussion, Dsfrling “discovered” a despatch (July
1823) forbidding his predecessor to renew the old Bank’s
charter. A run set in. Darling would agree to advance
money from the Treasury to ward off panic only on con-
ditions amounting to the compulsory liquidation of the
Bank of New South Wales. Opinion rallied to its support.
D’Arcy Wentworth and W. Redfern successively presided,
and though the charter was declared invalid on the ground
that Brisbane had had no right to grant it, the first
president J. T. Campbell returned to pilot the Bank into
re-organization as a joint-stock co-partnership, as from
I January 1828. Even so the damage to its credit seemed
likely to be mortal, and a government loan was accepted
in the following year on the drastic condition that the
Bank be wound up within twelve months.^ But a new
cashier and secretary, John Black, succeeded before the
year was out in repaying both the Government loan and
declaring a dividend. It is said that in doing so he de-
pleted the cash in the Bank’s chest to twenty-nine pounds !
Under Black’s management, however, Macquarie’s Bank

' Sydney Gazette , quoted in View of Premises y 1907.

“GOVERNOR MACQUARIE’S BANK” 6i

was to outlive the Bank of Australia and to outgrow in
resources its competitors of British origin. The temporary
superiority of the Bank of Australia by virtue of the favour
and deposits of the Government did not save it from col-
lapse in 1843.^ The co-partnery form of the senior bank
was strengthened in 1850. At the dawn of the gold boom
it was incorporated afresh under a local act, with an
augmented capital.

Macquarie’s way of providing and regulating the colonial
currency, as its determined survival shows, had taken
early and deep root. The chief danger of Australian banks
thenceforward may be traced to the multiplication of such
regulators. The phase of competition was perhaps in-
evitable, but the rule of sound money like the rule of law
calls for a single sovereignty.^

^ See The Hobler Papers (Mitchell Library), 18 October 1848, vol. vi,
p. 52, as to its liquidation. For the later history of the Bank of N.S.W.
see the above cited View of Premises ^ 1907, passim,

^ A. S. J. Baster, The Imperial Banks, a study of the development of
colonial banks with headquarters in London, was published after this
chapter was vyritten. It is strongly recommended to students.

CHAPTER V

An Autocrat in a Hurry

Being of a generation whose fathers had seen
I General Wade transform the Highlands after Mar’s
^ Rebellion and which was still learning from Thomas
Telford the arts of civil engineering, Macquarie naturally
set high store by the civilizing power of externals. And
posterity has agreed in honouring him most for public
buildings of a dignity which still charms the eye, and roads
which first made land travel practicable. We are mainly
perceptual beings. It is easy also to ascribe to these changes
the growth of a pride in the colony as a permanent home.
A generation was growing up in New South Wales which
had known no other.

His General Order issued after a first tour of the settle-
ments upbraided his subjects for their unsuitable houses,
the absence of barns and their miserable clothing — a lack
of standards bespeaking the despair of exiles. An early
despatch asked for a well-qualified architect and warned
the Secretary of State of heavy expenditure on the renova-
tion of roads and bridges. But his free drawing upon the
Treasury soon roused concern at home. In July i8ii,
Liverpool, in charge of the War and Colonial Office,
trusted “that no public buildings whatsoever have been
commenced, the construction of which was not indispens-
ably required for the Public Service”. Yet a Secretary
of State at Westminster, beset by Treasury officials, and
a Governor disposing in a virgin land of the labour of many
bondmen could scarcely agree as to what was indispensable.
“It is impossible”, complained Liverpool, “to point out

AN AUTOCRAT IN A HURRY 63

what expenses have been unnecessarily incurred or in the
execution of what services retrenchments might have been
made. ” The bills drawn mounted up. In 1808 they totalled
£25,000, in 1809 £16,738 — these were the years of inter-
regnum—£59,378 in 1810, £71,085 in 181 1, and £30,869
in less than four months of 1812. All this in time of war!

Long range fire from Downing Street was of course
trained on the outstanding public buildings. No public
architect was sent; that would have aided and abetted
extravagance. By every mail there came instead pro-
hibitions of unnecessary spending, comparisons, “not in
your favour”, with past governors.

Lachlan Macquarie was not the man to sing small. No
governor “here or in any other of His Majesty’s Colonies”,
he claimed, had been “more rigidly vigilant and watchful
in the public expenditure of money, provisions and stores
belonging to the Crown”. “Conscious, therefore, of my
own Integrity and Rectitude and of the Honourable Purity
of my Motives”^ he bade his superiors remember the pass
Sydney was in when he assumed office. Less than a
hundred bushels of grain were in store ; two regiments were
on his hands for four months; the settlers’ crops were swept
away by another Hawkesbury flood; new settlers on safer
forest land had to be victualled while clearing their farms;
Phillip’s original barracks and quarters were collapsing
because of green and unsuitable timber. “Without vanity
and with great truth ”, he had already done in less than three
years “more for the general amelioration of the colony, the
improvement of the manners, morals, industry and re-
ligion of its inhabitants ” than Hunter, King and Bligh all
together. By October 1814 he thought his annual ex-
penditure, then £75,000, likely to fall by a third within
two years, “if my plans of Reform and Economy shall be
Approved and Meet my own expectations”. Surely this
man was the father of all Australian Treasurers I

1 Macquarie to Liverpool, 9 November 1812, //. fl. of A. series i, vol. vn
p. 526.

64 AN AUTOCRAT IN A HURRY

Many forces beyond his control combined to defeat
his expectations. At his side was Mrs Macquarie, a lady
of refined taste in buildings. As Whitehall sent no
official architect, the Governor found one amongst those
sent as prisoners. Francis Howard Greenway of London
training had practised as an architect in Bristol and Bath.
But times of war are hard for architects, and in 1812 he
was “sent>out” for fourteen years for concealing effects in
bankruptcy. Reaching Sydney in February 1814, he sub-
mitted ambitious plans for a town hall and market house
before the year was out. Though not accepted, they evi-
dently won admiration, for in 1815 a more grandiose scheme
included a bridge over the harbour at Dawes Point. His
services in detecting faulty work in the foundations of the
Rum Hospital led Macquarie to accept Greenway’s offer
to “erect more and better buildings in four years” than
had been built since flic colony’s foundation. He was made
civil architect in 1816 and assistant to the Inspector of
Public Works, Captain John Gill, 46th Regiment. This
partnership, employing convicts on day labour, set a new
standard in colonial architecture which influenced private
as well as public building throughout Van Diemen’s Land
and New South Wales.

Greenway’s late Georgian work may still be admired
in Hyde Park Barracks and St James’s Church, Sydney,
in St Matthew’s at Windsor, perhaps in Burdekin House
in Macquarie Street, in “Subiaco” at Rydalmere and
“Newington” on the Parramatta.^ He worked in a style
“simple and stately, although of humble execution”. The
secrets of his strength are scale and proportion. He
brought into the convict colonies a quality which dignified
the pleasant homesteads of the “Old Colonial” days, in
their shady gardens of great trees, both native and exotic,
and preserved for a time the tradition of an earlier ele-
gance.

^ See Hardy Wilson’s incomparable treasury of drawings, Old Colonial
Architecture in Mew South Wales and Tasmania*

AN AUTOCRAT IN A HURRY 65

But the flame of his genius flickered and was gone, for
his days of public employment were sadly few. Mac-
quarie emancipated him in December 1817, and induced
the Secretary of State to confirm, temporarily at least,
his appointment as civil architect. But expenditure was
rising again, to the scandal of Whitehall. Scapegoats were
being sought, especially among the emancipists Macquarie
had befriended. Plans and work for a new church of
cathedral proportions, where Sydney Town Hall now
stands, were vetoed in 1819 by Commissioner Bigge. He
thought Greenway slack and “indulgent”, given to a love
of ornamentation. So his plans for a water supply to town
and port, and for the City which was to be, passed into
limbo. In 1821 the most taler4.ted and far-sighted of
Macquarie’s servants went back to private practice and
obscurity.^

The renewed activity in public works rose, however,
out of more than personal influences. A way had been
found over the Blue Mountains. Great fertile plains and
teeming rivers were there. And a big influx of convicts
came out after the peace with France and the onset of post-
war depression at home.

Before 1813 explorers looked for a way inland up the
river-valleys such as the Grose and the Warragamba. With
possibly one exception they had been baffled by gorges
“of the most barren and forbidding aspect”, where even
the crows seemed to have lost their way. Perhaps the
taciturn George Caley had caught a glimpse “of better
country farther out” — the lure ever since to squatters
gambling with drought. But Caley was stopped in 1804
by mutiny when within “cooee” of success.^ It was left
to Gregory Blaxland to hit upon the plan of working along
the crests of the confused ridges. He was a substantial
grazier whose pastures drought had scorched. In May
1813, with Lawson, a surveyor, and D’Arcy Wentworth’s

^ Sec article on F. H. Greenway in Australian EncyclopaediafYohi, p. 581.

® See article on George Caley in Australian Eruyclopaediay vol. i, p. 228.

66 AN AUTOCRAT IN A HURRY

son, William Charles, aged 22,^ he hacked and tore a way
through undergrowth and over rises to Mount Blaxland,
53f miles west of the Nepean. They turned there, battered
and sick, but triumphant. They had looked West over
open grass lands boundless in extent. Winter broke;
when it was over, Macquarie sent G. W. Evans, his
assistant-surveyor, with four convict servants and a guide
from Blaxland’s party, to test the hopes aroused. Early
in the new year (1814) they returned, having traversed
a hundred miles of rolling grassy plains, abounding in
game, with rivers full of strange but excellent fish, ‘'vast
areas of grazing country not divided by barren spaces as
on the east side of the mountains”, “soil exceeding rich”
growing the finest grass and herbs, “hills green to the
tops and country like a park and grounds laid out”.^
A cart-road thither, said Evans, could be made in three
months by fifty lalS'6urers.

Could a Governor hesitate at such a prospect? In July
Captain Cox began making the road. “The Expence of
constructing it”, Macquarie explained to Bathurst, “will
be very trifling to Government, the Men Employed in it
being Convicts who Volunteered their Services on Con-
dition of receiving Emancipation for their Extra labour.
This is the only Remuneration they receive except their
Rations”.^ In sanctioning a road even to these attractive
Bathurst Plains there was need of explanatory caution.
He had already found the Colonial Office very stiff in
its criticisms of roads and bridges. “Making Permanent
Roads and Bridges is one of the first steps towards Im-
proving a New Country”, wrote the sententious Governor
in justifying a turnpike road to the Hawkesbury. Liverpool

^ Sec A. W. Jose, Builders and Pioneers of Australia, p. 38.

* These phrases are from Evans’ Journal, H, R. of A. series i, vol. viu,
pp. 165-77.

• Macquarie to Bathurst, 7 October 1814, i?. of A, series i, voL vni,

p. 315. This emancipation as reward for extra labour would take the place
of the wages they could earn about Sydney “in their own time”. Gf.
Macquarie to Bathurst, a8 June 1813, op, cit, vol. vii, p. 781.

AN AUTOCRAT IN A HURRY 67

agreed, but questioned whether the British taxpayer should
be the paymaster. “Permanent roads and bridges’*, it
seemed to him, “will be the off-spring rather than the cause
of internal prosperity** — a doctrine logical enough in an
old country. But Macquarie was facing the needs of a
country still to be occupied and notably lacking natural
means of access such as navigable rivers. “Permanent
roads through this Wide Extended Colony**, he persisted
even in 1812, “cannot be Constructed at the entire
Expence of the Inhabitants for many Years to Come, and
they imagine they have a right to expect that at least
a part of the Colonial Revenue, particularly that part of
it Collected on the Very Spirits of which they drink
such Quantities, ought to be laid out and Appropriated
to the Construction of Permanent Roads and Bridges,
Streets and Wharves, Wherever these are essentially
necessary.”^

He had already constructed turnpike roads over the
coastal plain to the Nepean River and to Liverpool. The
tactful name of the latter destination did not, indeed,
persuade its eponym that there was a difference between
colonial and other revenues of the Crown. If the spirit-
duties were spent on roads, they could not be used to lessen
the burden of sending and maintaining the convicts. He
begged the question by arguing that if the free setders
could not pay for the roads, this proved that the colony
was not advanced enough to need them.^

When, however, news of Bathurst Plains confirmed
Macquarie’s every hope for the colony’s future, he put
aside the plea that Britain could not afford roads into this
wonderland. A new Secretary of State had sanctioned
the other turnpike roads on the ground that tolls would
recoup the expense, but had boggled at transmontane

^ Macquarie to Liverpool, 1 7 November H. R, of A, series 1, vol. vn,

pp. 604-5.

* Liverpool to Macquarie, 5 May H.R.of A. series i, vol. vii, p. 480.
The same despatch calls for a quarterly or at least an annual statement
of colonial revenues under nine heads.

5-2

68 AN AUTOCRAT IN A HURRY

roads ‘‘while His Majesty’s Treasury at home is subjected
to an Expence of from Seventy Thousand to One Hundred
Thousand Pounds per Annum for the Support of the
Colony”.^ The demurrer came too late; it crossed a despatch
in which Macquarie announced his new programme of
buildings and roads, asked leave to build a new church, large-
scale convict barracks and a better court-house. After that
he would reduce the gangs of artificers and labourers.

The works already begun Bathurst allowed, “as they are
to be defrayed from the Colonial Funds”. The court-house
he vetoed; the church and barracks were to be built if
the colonial revenue would stand the charge. But this,
with a general promise to second improvements that took
the form of schools and glebe-houses, threw the leash from
the straining ambitions of Greenway and his vice-regal
patrons. “Availing myself of the discretionary power Your
Lordship has beerfkindly pleased to grant Me of erecting
such Public Buildings as Can Conveniently be paid for
from the Colonial Revenue”,^ Macquarie let contracts
for churches at Sydney, Windsor and Liverpool, set about
building by convict gangs a new Factory for female con-
victs at Parramatta, glebe houses at Liverpool, Parramatta
and Casdereagh, and planned a new Civil Court House.

How could ministers at Whitehall control such a man?
Could such ambitious plans possibly be sound? The
colony was certainly growing: 16,493 male convicts were
sent out between 1810 and 1820, 11,250 of whom em-
barked in the last four years. Colonial revenues from
import and port duties had increased from £10,000 in
1811 to ^(^25,884 in 1820. But this obstinate builder’s
calls on them, amounting to £%oo^ in 1811, ^^6,920 in
1815, 6,486 in 1819, had increased also. More floods

along the Hawkesbury in 1816, 1817 and 1819 had thrown

^ Bathurst to Macquarie, 3 February 1814, H. R. of A. series i, vol. viii,
p. 132. This despatch must have been written before the news reached
England of Evans’ exploration of the interior.

* Macquarie to Bathurst, 4 April 1817, H, R, of A. series i, vol. ix, p. 353.

AN AUTOCRAT IN A HURRY 69

back many assigned servants upon government rations.
Macquarie’s bills drawn on the Treasury for rations and
stores and its own expenses in fitting out convict transports
had mounted to a total of ^^2 2 7,000 in 1814, and almost
;^240,ooo in 1817. Rebukes had been met by protestations
of future amendment, regularly falsified by the event.
A grudging approval had been twisted into a programme
of extravagance.

Most disquieting was another aspect of Macquarie’s
rule, his preference for emancipists, and the bad relations
with the respectable settlers and officials to which that
preference had given rise. Was the man a despot basing
his power on mob-favour? His lineage and career bespoke
an aristocrat of high and dependable character. Yet every
vessel out of Port Jackson brought rumours and, after 1815,
official word of discord in high places. Could public order
in New South Wales survive recrimination between the
Governor and the judges? By what idea of the colony’s
future could Colonel Macquarie be inspired or possessed?

In January 1819, to set such doubts at rest, the
Secretary of State commissioned John Thomas Bigge, chief
justice of Trinidad, to ascertain “how far in its present
improved and increasing State” the colony was “sus-
ceptible of being made adequate to the Objects of its
original institution”. In Whitehall’s view New South
Wales was still a prison, and transportation thither a punish-
ment to deter men and women in Britain from crime.
“The Settlements in New Holland must clearly be con-
sidered as Receptacles for Offenders. ... So long as they
continue destined to these purposes by the Legislature of
the Country” (i.e. of Great Britain and Ireland), “their
growth as Colonies must be a Secondary Consideration,
and the leading Duty of those to whom their Administra-
tion is entrusted will be to keep up in them such a system
of just discipline as may render transportation an Object
of serious Apprehension”.^ It seems to have been all this

* Bathurst to J. T. Bigge, 6 January 1819, H. R. of A. series i, vol. x, p. 4.

70 AN AUTOCRAT IN A HURRY

in the days of the naval governors. As evidence that trans-
portation to New South Wales under that iron discipline
had answered ‘‘every end of punishment’’, Bathurst
quoted “instances on record in which convicts have
expressed their desire that the sentence of transportation
might be commuted even for the utmost Rigour of the
Law”. Such action was intelligible in any who had heard
of the ho^rrors of the Second and Third Fleets, the voyage
out being thought the worse half of the punishment. But
speculation by contractors in the lives of the convicts in
transit had been checked by the appointment to each
transport of at least one naval surgeon, with powers which
even the captain overrode at his peril.^ In New Holland
also the scene was changed, and transportation had lost
its terrors. “Numerous applications are made by those
who are sentenced to imprisonment for minor transgres-
sions that they m^ be allowed to participate in the
Punishment to which the greatest offenders are con-
demned.” This was outrageous, thought Whitehall.

“The great End of Punishment is the Prevention of
Crime”, wrote Bathurst. “If, by ill-considered Com-
passion for Convicts, or from what might under other
circumstances be considered a laudable desire to lessen
their sufferings, their Situation in New South Wales be
divested of all Salutary Terror, Transportation cannot
operate as an effectual example on the Community at
large, as a proper punishment for those Crimes against
the commission of which His Majesty’s Subjects have a
right to claim protection”. Thus Bigge’s commission
virtually dictated the condemnation of Macquarie’s active
employment of convicts on public works for an emancipists’
Utopia where, when they had expiated their crimes, they
should enjoy a new Britain under blue skies.

Macquarie’s emancipist leanings, it may be argued,

^ An account of the conditions aboard convict transports under these
more humane conditions may be read in The Frew Papers (Mitchell Library),
the vessel on which the Frews reached South Australia having encountered
an outward-bound transport near the Gape.

AN AUTOCRAT IN A HURRY

were a result of the party leadership which came to him
from Bligh. When on his twelfth day of office he raised
to the magistracy one Andrew Thompson, leading setder
on the Hawkesbury, he was rewarding the man and the
district for loyalty to Bligh and rebuking the usurpers the
more pointedly by disregarding Thompson’s ex-convict
status. Colonel Foveaux had warned Macquarie against
the Revd. Samuel Marsden, and when the chaplain
attacked Thompson’s appointment his criticisms served
only to arouse the despot in Macquarie. He adopted as
a deliberate policy the very elevation of emancipists at
which Marsden cavilled. Possibly the Scots laird en-
joyed out-Christianing the Anglican parson.^ In August
1810, Simeon Lord, a wealth) Sydney trader, but an
ignorant and low-lived ex-convict, was also raised to the
bench, and Macquarie tried to associate both Thompson
and Lord with Marsden, the senior colonial chaplain, as
trustees of the public roads. Marsden would not act with
them, giving as his reason their notoriously bad characters.

Fate was not kind to Macquarie and his friends. Thomp-
son died within nine months of his elevation, leaving to
his patron a large share of a fortune based on trade in
spirits. The legacy was accepted by Macquarie as proof
of the giver’s good will, but it became a target for gibes.
Lord, subjected to insults in open court, ^ was persuaded
by Bigge and Macquarie, at Governor Brisbane’s coming,
to retire from a position he had neither strengthened nor
adorned. Redfern, a naval surgeon transported for being
an accessory to the mutiny at the Nore, was promoted by
Macquarie in the teeth of Bigge’s advice and Bathurst’s dis-
approval. At the accession of George IV Macquarie was
flatly ordered to omit his name from the new commission
of the peace.

1 Cf. H. R. of A. scries I, vol. ix, p. 499, where Macquarie in submitting
a list of secret opponents places Marsden at the head of “ this List of Mal-
contents”.

* “You are a great man now, Mr Lord”, cried a woman expiree, “but
you came into the colony in the same situation as myself.**

72 AN AUTOCRAT IN A HURRY

Frowns from high places and social boycotts of his
“pets” in Sydney^ merely provoked in the Governor a
fierce antagonism to colonists who had not been prisoners.
From thinking ex-convicts the most useful members of the
community, he passed in November 1812 to asking that
“the Free Settlers sent out from England may be limited

to as small a number as possible These Free Settlers are

the most^ discontented Persons in the Colony”.^ This may
have been true, and may also have been to the discredit
of a majority of them, sent out as ne’er-do-wells on family
sentences of “ conditional remittance ” and always clamour-
ing for government grants and donations. But discontent
may have been justified in those who were pioneer stock-
raisers despite Macquarie’s disfavour.^ They acquired no
merit in his eyes by success. Blind like his predecessor to
the importance of any rural pursuit but tilling the soil, he
sneered at grazier^^who gained “a very large Fortune
without any trouble to themselves, the laborious parts of
Husbandry being entirely left to the poor Emancipated
Convicts or free persons of Inferior Origin ”. He repeatedly
accused of laziness John and Gregory Blaxland, pioneers of
the cattle industry.^ In the colony the Governor acknow-
ledged Gregory Blaxland’s merit as the conqueror of the
mountain barrier. In his reports to England he suppressed
that merit.

In advocating the concession of trial by jury of the
people, another plank from the pro-Bligh party’s platform,

^ See Ernest Scott, Short History of Australia, pp. 101-4.

* Macquarie to Liverpool, 17 November 1812, in H, R, of A. series i,
vol. vn, p. 597.

* As to the method of distributing convict servants between government
and private employers, see M. Phillips, op. cit. p. 130, and note to p. 13.
“From 1814 to 1820 2418 mechanics arrived, and of these 1587 were
assigned to government”.

* See for examples, Macquarie to Liverpool, 17 November 1812, and
Macquarie to Bathurst, i March 1815, H, R. of A. series i, vol. vni, pp. 427-8.
More than a year after Gregory Blaxland had, with Macquarie’s full know-
ledge, planned and carried to the point of success the crossing of the
mountains, Macquarie wrote of them as “ having never benefitted the Colony
since their arrival in it now nearly nine years ago”.

AN AUTOCRAT IN A HURRY

Macquarie gave his emancipist principles free rein.
Bathurst had doubts whether the rule of trying men by
their peers could be applied to a society of such “peculiar
constitution “Would that principle be fairly acted upon,
if free settlers were to sit in judgment on convicts?. . .
Would it be prudent to allow convicts to act as jury-
men?... Would not their exclusion be considered an
invidious mark. . .at variance with the Great Principle
upon which the institution is founded?” The Governor
agreed that only the free should be eligible but laboured
to put aside all distinction between free and freed. “Once
a Convict had become a Free Man, either by Servitude,
Free Pardon or Emancipation, he should in All Respects
be Considered on a footing with every other Man in the
Colony, according to his Rank in Life and Character.”
The rub was in this last clause. The emancipists by whose
advancement Macquarie chose to prove the vigour of his
faith only demonstrated that punishment as then practised
had certainly not exalted the characters of the most
eminent ex-convicts. This was fatal to the success of his
generous policy. As Bigge complained, Macquarie was
trying not to restore to such emancipists their rank in life
but greatly to raise it. Like many despots he thought to
press folk into the designs he premeditated. Public
buildings are things on which, as on the Perth Town Hall
(W.A.), the broad arrow may be a pleasant historical
decoration. But human beings are otherwise constituted.

Macquarie, his biographer thinks, “had neither the
education nor the natural good taste to distinguish one
man from another in the ranks below him”. Too im-
patient to await the slow process by which each free
generation appraises its leaders and culls its recruits for
this and that calling, he thought he could build a com-
munity like a barracks or a church with convicts and
emancipists only. But it was a destructive party spleen
which inspired such notions and they took a fatal hold
on the inferior mentality of many around him. Should

AN AUTOCRAT IN A HURRY

his policy be dictated, Macquarie asked ministers at home,
by the wishes of those who came free to the colony, or
should he ‘‘so construct it as to hold out the greatest
possible rewards to the Convicts for Reformation of
Manners by Considering Them, when this is the Case,
in every way entitled to the Rights and Privileges of a
Citizen who has never come under the Sentence of
Transportation**?^ He did not stay for an answer, but took
it as a foregone conclusion and, though the fame of the
wool pastures was already growing, his measures reduced
free immigration to a mere trickle during the later years of
his term of office. ‘Tn Coming to New South Wales (Free
Settlers) should consider that they are coming to a Convict
Country, and if tliey are too proud or too delicate in their
feelings to associate with the Population of the Country,
they should consider it in time and bend their Course to
some other Country in which their Prejudices in this
Respect would meet with no Opposition**.^ Seven-eighths
of the men-convicts available were employed on public
works, leaving few to be assigned to the settlers. When in
1817 “a low Rabble’*, in the vice-regal phrase, signed a
memorial to the Commons against his arbitrary acts, they
found themselves shut out from land grants and the
customary indulgences of stock and labour, for daring “to
asperse my personal honour and Government*’.®

Ministers sought by light hints to turn this hard-
mouthed steed, but their touches were taken by him for
a shaking of the reins in encouragement. Macquarie read
Bathurst’s warnings against the effects of a forcing policy

^ Macquarie to Bathurst, 28 June 1813. For anticipations of restrictions
on immigration see Macquarie to Liverpool, 17 November 1812, //./?. o/'i4.
series i, vol. vii, p. 594, and Bathurst’s reply, 8 February 1814, vol. viii,
p. 128. Macquarie again, vol. viii, p. 303.

* Macquarie to Bathurst, 28 June 1813, in H, R, of A. series i, vol. vn,
P- 775*

• See H. R. of A, series i, vol. ix, note 77, on p. 866. Cf. p. 736. The
acts of which the memorial complained included influencing the decision
of a jury of inquest, ordering corporal punishment without inquiry, and
seizing lands and houses. On the disputes between Macquarie and the
judges, sec Marion Phillips, op. cit. ch. vn.

AN AUTOCRAT IN A HURRY

in favour of emancipists as a full endorsement of his doings.
“Some illiberal Men in this Country Would destine a
fellow Creature who has once deflected from the Path of
Virtue, to an Eternal Badge of Infamy. ... I am happy
in feeling a Spirit of Charity in Me which shall ever make
Me despise Such Unjust and illiberal Sentiments”.^

Doubts grew. What would be the effect of such Charity
on the convicts? It indited bitter despatches against
judges, clergy and free-settlers. It built “good and com-
fortable accommodation” to house 1200 male prisoners.
It made the saying proverbial that the surest way to vice-
regal favour was having worn the badge of conviction for
felony. Was it practicable to “hold out the greatest possible
rewards for Reformation of Maimers” without inviting
clever rogues to seek them?

Jeffery Hart Bent, when Judge-Advocate, had cut
Macquarie to the quick by contending that the Governor’s
doings were against the wishes of His Majesty’s Govern-
ment; but Downing Street managed its puppet despot
on very slack strings. A mild reproof of extravagance
drew from him in December 1817 a letter of resignation.
Bathurst’s reassurances, inviting its withdrawal, although
the despatch containing them reached Sydney, were
somehow kept from the Governor. He fretted under
what he thought the unacknowledged suspension of his
resignation.^ Bigge’s arrival in September 1819 limited
his policies by a sort of consular veto. Chafing under the
Commissioner’s constant criticisms, he asked again to be
relieved. Yet at the end he quitted his realm with
reluctance. After his successor. Sir Thomas Brisbane, had
come in November 1821, Macquarie went on progress
through the scattered settlements.

Like James I he had “felt himself as an immense brood-
fowl set over this land, and would so fain gather it all

^ M. to Bathurst, 7 October 1814, H. R. of A. series i, vol. vni, p. 316.

• For the resignation see Macquarie to Bathurst, i December 1817,
H,R, of A. series i, vol. ix, pp. 495 et seq, Bathurst’s reply is in vol. ix, p. 838.

76 AN AUTOCRAT IN A HURRY

under his wings”. ‘‘Under the Divine protection”, he
told the Hawkesbury farmers, “we have been advancing
towards a degree of civilization and comfort which can
only render life one of enjoyment to those who have been
accustomed from early habits to the manifold blessings
extending to the whole population in the Mother Country”.
The oft-quoted passage in the apologia for his work which
he wrote after his return to Britain still stirs Australians
to sympathy with a great-hearted lover of the infant
colony.^ “I found the Colony barely emerging from
infantile imbecility, and suffering from various privations
and disabilities; the Country impenetrable beyond 40
miles from Sydney; Agriculture in a yet languishing
state; commerce in its early dawn; Revenue unknown;^
threatened by famine; distracted by faction; the public
buildings in a state^pf dilapidation and mouldering to
decay; the few Roads and Bridges, formerly constructed,
rendered almost impassable; the population in general
depressed by poverty; no public credit nor private con-
fidence; the morals of the great mass of the population
in the lowest state of debasement, and religious worship
almost totally neglected....! left it, in February last,
reaping incalculable advantages from my extensive and
important discoveries in all directions, including the sup-
posed insurmountable barrier called the Blue Mountains,
to the westward of which are situated the fertile plains
of Bathurst, and in all respects enjoying a state of private
comfort and public prosperity, which I trust will at least
equal the expectation of His Majesty’s Government. This
change may indeed be ascribed in part to the natural
operation of time and events on individual enterprize.
How far it may be attributed to measures originating with
myself and my zeal and judgment in giving effect to my

1 Macquarie to Bathurst, London, 27 July 1822, H. R, of A. series i,
vol. X, pp. 671-3.

* On p. 675, in the same letter, he mentions Port duties of £8000 per
annum which by 1821 had reached £28,000 to £30,000.

AN AUTOCRAT IN A HURRY

instructions, I humbly submit to His Majesty and his
Ministers.”

These claims reveal more than the egotism of the despot,
swallowing up all credit for the activities of his subjects.
By their emphasis on the comforts of civilization and by
the slightness of the references to colonial flocks and herds,
they suggest that Macquarie’s mind stuck in the bark of
externals, and missed the inner meaning of efforts to make
New South Wales a colony of self-providing and permanent
homes.

The social and economic weaknesses of the convicts were
not to be exorcised by a spirit of charity which gave them
comfortable employment on public works. These measures
concentrated more than half the population of the colony
in Sydney and subsidised unemployment there as early
as 1817.^ Convicts and emancipists were necessarily a
wasting as well as a weak foundation. In October 1821
they numbered 19,126 adults out of a total of 29,783 in-
habitants, but the disproportion of the sexes meant that
most could know no family life. There were 15,939 con-
vict men and only 3187 women. Of their children, who
numbered 7224, many turned away from Macquarie’s
design of copying the comforts of Britain.® They with the
free settlers — 1489 adults and 1884 children — were the
active elements in the advance over the inland plains
which followed the collapse of his building boom. When
Brisbane discontinued public works, the “old hands”
passed into the service of the squatters, as hut-keepers
and shepherds.® The white-trash of Virginia and the
Carolinas perished as Lee’s incomparable infantry. In
a nobler cause the ex-convicts died as sentries beside

^ Sec Marion Phillips, op. cit. pp. 134, 149.

^ “Nationalism”, thinks Dr Phillips, “the strongest characteristic of the
Australian of today, is a legacy from these sons of e:dles, for whom Australia
was a land of hope and promise.” Op. cit. pp. 260-1. It certainly has at
times a psychologically suspicious stridency.

* As to the overwhelming of the convict blood by the free immigration
of the gold-discovery decade, see T. A. Goghlan, Labour and Industry^ pp. 562
et seq.

78 AN AUTOCRAT IN A HURRY

the peaceful productive sheep who won Australia for the
white men.

Macquarie had shown good sense and resolution in his
reform of the currency, but his vacillation about public
agriculture suggests that a laird’s paternalism prevented
his seeing the economic futility of convict labour in public
employ.^ His public buildings, for all their innocent
charm to-day, were laxly supervised and so continued the
enervating precedent of reliance on government. He was,
maybe, the second founder of Sydney, but not of Australia.
By his vendetta against free settlers he roused the first
whisperings of a hostility towards immigrants which
still comes ill in a spacious land fi'om the beneficiaries
of John McArthur, Caroline Chisholm and William
Farrer. And how could his or any other Bank discharge
to the best advantage its function of entrusting the
material resources ofthe community to those most capable
of directing their increase if the Governor set his face
against the free activity of the free ? The days of paternalism
were over.

^ In his first despatch, still mindful of Castlereagh’s instructions, he con-
demned the government farming which was shortly afterwards discontinued.
See 30 April 1810, H. R. of A. series i, vol. vn, pp. 250-1. When, however,
Bigge suggested that convicts could be productively employed thus, he tried
again at Emu Plains in 1820. See vol. x, p. 680, and Adventurer of Ralph
Rashleigh, chapters viii and ix.

CHAPTER VI

o o

John Bull’s Greater Woolsack

o ^ o

IN the eighteen-twenties, the figures in the foreground of
the Australian scene suddenly shrink into insignificance.
Governors still rule with little ease the turbulent Sydney
populace. Officials still push their friends’ interests, or plan
the better training of the unspoilt generation. Traders still
serve their own turn. But a curtain has been raised. These
petty folk and their coastal land grants, totalling, since the
colony’s foundation, less than 325,000 acres, are dwarfed
by the mighty drama of free settlement inland. More
than Blaxland’s cattle have escaped from vice-regal restric-
tion. John McArthur, who had traded, ruled, intrigued
and made money for a quarter of a century at Parramatta,
at Sydney and at Westminster, had all along insisted on
wasting his substance in pursuit of a dream that the colony
would some day export fine wool. Suddenly men realize
that he is right — that fine wool is no dream but the master-
stroke of a pragmatical genius.

His wool-gathering originated in a deduction he made
in 1794. from the results of putting a young Irish ram
with some Bengal ewes. ‘^By crossing the two breeds
I had the satisfaction”, he told Bigge in 1820, ‘‘to see
the lambs of the Indian ewes bear a mingled fleece of hair
and wool. This circumstance originated the idea of pro-
ducing fine wool in New South Wales’’.^ The Bengal
sheep produced a covering which when shorn in early
summer for the animal’s comfort went as a matter of

^ See generally S. Macarthur-Onslow, Ear Records of the Macarthurs of
Camderiy chapters iii, rv, ix, and T. A. Goghlan, Labour and Industry in
Australia, part i, chapter vu.

8o JOHN BULL’S GREATER WOOLSACK

course to the rubbish tip. The Irish sheep’s wool was little
better. At a time of high values it was worth only grf. a
pound at home. But the mingled hair and wool on the
lambs of this cross suggested to McArthur that if he used
the right sheep he might breed wool worth shillings a
pound. This, if grown on free or cheap land, would bear
the light expense of convict labour, and would cost little
freight as back-loading on returning transports, which, at
that time, went empty to China to load cargoes of tea.

The fate of 44 sheep brought by the First Fleet was not
encouraging. They had been worried by dingoes and
stolen by convicts till but one remained. But ‘'Elizabeth
Farm” at Parramatta was twelve miles from Sydney and
partly guarded by water. Through Captain Waterhouse
of the ‘Reliance’, McArthur obtained in 1797 the sheep
he wanted — four or five Merino ewes and three Merino
rams from the flock 4rf one Colonel Gordon, a Scot in
the Dutch service at the Cape. This nucleus of the first
Australian Merino stud was supplemented in 1805 by five
rams and one ewe from the Royal Stud at Kew.

In buying these, McArthur, sent home under arrest by
Governor King, had become involved in a feud with Sir
Joseph Banks which almost wrecked his plans. The two
men were seeking independently some export which would
give the colony a means of self-support. Banks, when urging
in 1 798 that Mungo Park, the African explorer, should be
sent to solve the riddle of the interior, held it to be incon-
ceivable “that such a country, situate in a most fruitful
climate, should not produce some native raw material of
importance to a manufacturing country as England is”.
If found, such a material might repay the cost of establish-
ing and maintaining the colony.^ McArthur, in search of
influential patrons for his project, took much trouble with
a collection of African natural history specimens for Sir
Joseph which was carried on from St Helena by the East
Indiaman on which he reached England. His pains over

^ Sir Joseph Banks to Under-Secretary King, 15 May 1798.

JOHN BULL’S GREATER WOOLSACK 8i

the safe delivery of the cases earned only a dry acknow-
ledgement from Banks, the colony’s chief advocate and
friend at court.

McArthur found other aid. In July 1803 the clothing
interest was promoting a bill in Parliament to relieve
their industry from the restrictions imposed by the Eliza-
bethan Statute of Artificers. In the name of the fashionable
doctrine of laissez faire^ they sought the same freedom as
obtained in the cotton manufacture. They had been met,
however, by the formidable argument that expansion of
employment in their craft was impossible because of a
notorious dearth of the raw material. ^ Out of the blue
came Captain McArthur with his samples of wool grown
on Spanish sheep at the Antipodes, telling of wide empty
pastures from which they might expect the coming of
quantities beside which Spain’s nine million pounds would
seem a mere bagful. He wrote, in October 1805, of ‘'tracts
of land adapted for pastures so boundless that no assignable
limits can be set to the number of fine-woolled sheep
which can be raised . . . with little other expense than the
wages and food of the shepherds”.

Sir Joseph Banks, whom the Office of Trade consulted
as President of the Royal Society and an explorer of the
scene, disparaged McArthur’s project. “I have seen
fleeces imported from New South Wales the quality of
which was equal to Spanish wools of the second or third
rate piles, but I have not seen any equal to the best piles
of old Spain. ... I have never heard of any luxuriant
pastures of sheep till I read of them in Captain Macarthur’s
statement, nor did I ever see such when in that country.”
What could be more authoritative? “I have my fears”,
he continued, ‘‘that it will be found on enquiry that sheep
do not prosper well there, unless in lands that have been
cleared and manured with some labour and expense. . . .
The freight of wool from Spain to England costs from

^ See Memorial to Treasury from Woollen Manufacturers, quoted in
Macarthur Records y p. 67. Also Coghlan, op. cit. p. loi.

SH 6

82 JOHN BULL’S GREATER WOOLSACK

id, to i\d. a pound. . . .What the freight of a ton of wool
from New South Wales will be I am not able to ascertain,
but it will certainly add very materially to its actual price
when brought to market.’’ Sir Joseph advised against en-
couraging McArthur in ‘‘a mere theoretical speculation”.

Such advice from one whose first-hand knowledge of
the land in question had been gained nearly thirty years
before in< the swamps around Botany Bay would have
aroused a less pugnacious man than John McArthur. He
met it first by a letter firom Captain Waterhouse who
had also run sheep in the colony. “The Universal mode
of feeding Sheep in that Country”, Waterhouse reported,^
“has been by driving them into the Woods, on the Natural
Pasturage. When I left the Colony there was not artificial
grass sufficient to feed a Lamb a week. . . . My Flock were
driven into the Woods after the Dew was off the Grass,
driven back for the Man to get his dinner, and then taken
out again until the close of the Evening, when they re-
mained in the Yard for the Night When brought home

earlier than usual, and finding fault with the Shepherd
for it, he said that they were so soon full that they had
lain down for hours.” As to freight, McArthur called before
the Committee one John Princep, a London merchant,
who quoted a fireight of per ton on wool as back-
loading in time of war, and ^^8 per ton in time of peace.
So fortified against Banks, the Committee recommended a
grant of lands to McArthur, subject to resumption with
compensation if the land were wanted for cultivation. It
supported, too, McArthur’s idea that the Governor should
be instructed to feed the convicts on mutton rather than
salt meat, and to pay a premium on mutton from fine-
woolled sheep.

McArthur sought a grant of ten thousand acres around
Mount Taurus in the Cowpastures, well beyond the lands
under tillage. Lord Camden, then in charge of colonial

^ The letter and McArthur’s covering memorial to the Committee of
Trade and Plantations are reprinted in the Macarthur Records, pp. 78 seq.

JOHN BULL’S GREATER WOOLSACK 83

affairs, was ready to make it, and McArthur sold his com-
mission in the New South Wales Corps in order to devote
fuller attention to his Merino flocks. For a time Banks
himself joined in talk of a company which should be
granted a million acres and be managed by McArthur.^
In August, however, there was a sale of Spanish Merinos
from the Royal Stud at Kew, where the antagonism
between McArthur and Banks flared afresh. The sheep
were the progeny of Merinos presented to the King in
1791 by a Spanish Marchioness. They afforded McArthur
the chance of adding to his Cape Merinos another strain.
Gordon’s Merinos were of the Escurial type^, while those
of the Royal flock were Negretti. Which was superior is
largely a question of fashion. The prestige of the Royal
flock no doubt favoured the Negretti, but in 1830 James
McArthur, John’s son, reported after a visit to Saxony
that ‘‘with their ample folds of skin and large dewlaps”
they were completely out of favour there.^

The sheep offered at Kew were culls and in poor con-
dition, but McArthur bid with determination and secured
more than his share. The highest price he paid was twenty-
seven guineas for a four-tooth ram, with fleece of 7 lb. 2 oz.
At the sale he met Banks who “at last when his aid was
needless evinced a strong desire to promote and patronize
the introduction of the merino sheep into Australia”.^
McArthur, resenting a patronage ill-distinguished from
tuft-hunting, forgot the rule “Agree with thine enemy
quickly” and offered the coldest front to the older
man’s advances. The sheep and their proud owner were

^ It was to have a capital of £10,000 and to pay for the manager^
services by allowing him all the mutton. The plan might well have tempted
the manager to be unfaithful to the plan of breeding first cf all for wool.
It remained a mere theoretical speculation.

* See J. D. Stewart, Presidential Address to the Royal Society of New
South Wales, August 1928.

® See Macarthur Records^ p. 439.

* From James Macarthur’s notes written in 1859 for Sir Roger Therry’s
use in writing his Reminiscences of N.S,W. and Victoria, and quoted in
Macarthur Records, p. 99.

6-2

84 JOHN BULL’S GREATER WOOLSACK

ready for embarkation on the ‘Argo’^ when a paragraph
in the Morning Chronicle reminded the purchaser of an old
statute forbidding the export of English sheep on pain
of forfeiture, fine and branding. Repairing hot-foot to
Downing Street, McArthur met Banks leaving Lord
Camden’s office. The legal obstacle was evaded by a
special Treasury permit, but McArthur had to content
himself with a grant of five thousand acres at the chosen
spot, to be supplemented by a similar area when his hopes
of increase should have been realized.

He returned triumphant on the main issue, bringing
back five rams and a ewe from the Kew purchase, expert
wool-sorters, two new settlers, vines and olive trees. After
a little demur at disturbing the sacred grove of the wild
catde, Governor King did Lord Camden’s bidding, and
for three troubled years McArthur watched his flocks in-
crease at Parramarth and at Camden Park, his new estate
in the Cowpastures.

That increase failed, however, to fulfil the hopes he had
held out to the clothing interest. Among other sheep-
breeders in the colony it excited scorn for the puny Merinos.
Bengal sheep always bred twice a year. Cape ordinaries
often did so. McArthur had based his reckoning of in-
crease on the growth of the colony’s total flock from
1531 in 1796 to 6737 in 1801. Assuming that on protected
pasture his flock would double in two and a half years,
he had predicted a production comparable within twenty-
five years with that of Spain. But he had reckoned without
his sheep. At his return he found that the crossing of
Merino rams with crossbred and comeback ewes gave
sheep of weaker constitution.* The coastal lands, we know
now, are not favourable to Merinos. They are more at

^ The ship which McArthur had purchased and adorned with the figure-
head of a golden fleece.

2 See Memo, by John McAi thur, in Macarihur Records ^ p. 72 . “As the cross
with the Merino blood advanced the young sheep became delicate and sickly
and the Ewes seldom lived to rear more than three Lambs — often not more
than one, and the Lambs were £is tender as their Mothers.”

JOHN BULL’S GREATER WOOLSACK 85

home on the drier Western slopes.^ But the fading out
of the hybrid vigour set colonial opinion against the whole
project of breeding for wool alone. McArthur did not
budge from his conviction that the colony must find a
staple: the British taxpayer would not always foot the
bills for rations, roads and public buildings. The Revd.
Samuel Marsden and others bred sheep for immediate
returns of mutton as well as wool. They found the type
hard to fix. But as McArthur’s sheep became more deeply
imbued with Merino blood they regained constitution.
With Cox of Windsor and a chosen few he made the future
of fine wool safe by sticking to pure Merino, and by
standing ready to supply Merino rams for all who would
breed first for wool, and for fine wool.

Nothing daunted him. He remained in exile from 1809
to 1817 rather than purchase immunity from arrest by
an apology for the part he had taken in deposing Bligh.
His wife Elizabeth trained his sons and watched the flocks
during his absence. When he returned in 1817 to the colony
he had roughly served, even the judges protested against
a move by Macquarie to raise him to the magistracy. He
retorted with energy upon their petty souls but his later
letters grew low-spirited under the torments of gout. They
still witness, none the less, to his old tenacity on the main
issue. “My feeble attempt to introduce Merino sheep”, he
told an absentee neighbour in 1818, “still creeps on almost
unheeded and altogether unassisted. Few settlers can be
induced to take the trouble requisite to improve their
flocks, or to subtract a few guineas from their usual
expenditure — tea and rum — to purchase Spanish rams.”*
“By storing the Country with Fine-Woolled Sheep” — he
is here coaching in colonial economy his son John, then
at the Inns of Court — “a most valuable export would be

^ This is strikingly shown on the “ Sheep Map of Australia”, Commonwealth
Tear Booky No. 20, p. 627.

* J. McArthur to W. Davidson, 3 September 1818, Macarthur Records y
P- 317-

86 JOHN BULL’S GREATER WOOLSACK

obtained, the returns of which would increase the demand
for labour and gradually prepare the colonists to depend
on their own exertions and in time enable them altogether
to provide for their own expenditure.

The routine work was within the competence even of
convicts. The main thing was that stockowners should
grasp the need of purity in the breed. It was a sure sign
that the^old man’s fad was at last being understood when
about 1820 Sydney speculators began to sell as ‘‘Pure
Merinos” coarse-woolled sheep showing a trace of that
blood. Finding Bigge receptive to his ideas, McArthur
offered to make the true breed accessible to all by selling
to government all the rams they would take for a price
in land valued at 7^. &d, an acre. He wanted elbow room,
some 50,000 acres. Only strict supervision in enclosed
ground had kept l^j.s stud pure. When he shifted it out to
Camden Park he would need a bigger scene for his main
flock. He offered to pay in fine-woolled rams for “a
certain proportion of such lands a Government now bestows
gratis and with no other object than the production of
corn and cattle, for which they are obliged to pay by
Bills on the English Treasury”,

While only the coastal plain was known, horned cattle
had multiplied almost as fast as McArthur had expected
of his sheep, 12,442 head of cattle in 1810 becoming 102,939
in 1820. After 1813, however, the sheep began to coun-
tenance the First Flockmaster’s hopes. From 50,000 in
that year they multiplied to 290,000 in 1821. Between
1814 and 1820, from 60,000 to 90,000 pounds of wool were
exported annually, forming as yet but a tiny fraction of
the imports from all sources into Britain. In 1821 New
South Wales and Van Diemen’s Land exported between
them 175,433 pounds of fine wool. In 1822 a gold medal
was awarded to John McArthur “for importing into
Great Britain wool the produce of his flocks equal to the
finest Saxony”. This meant that Australian wool could

^ Macarthur Records, pp. 328 et seq.

JOHN BULL’S GREATER WOOLSACK 87

reach a standard well above that of “the best piles of
Old Spain”. In 1827 he obtained a pound for a

bale bearing the famous “I.McA.” brand, a record price
that is still unbeaten.^ In 1831 New South Wales sent
1,134,134 pounds and Van Diemen’s Land 1,359,203
pounds. The 1,100,000 sheep in New South Wales in
1832 had by 1838 become 2,750,000. By 1849 there were
sheep in the mother colony, 6,000,000 of them
being in the Port Phillip District. Within less than three
decades a mighty expansion in the despised convict settle-
ments of New Holland “had changed the balance of
forces in the wool-world and had made Australia’s greatest
contribution to the strength of the Empire

John McArthur, well-loved and devotedly followed by
his own family until his death in 1 834, was indeed the happy
warrior who had “wrought upon the plan that pleased his
boyish thought”. But age, gout and the fierce scorn of
a superior mind for time-servers made him a poor apostle
of an idea which had by this time won some trial in
many another temperate country.® His contemporaries
obstinately refused to retract their mockery of his “pure
Merinos”. “Many do not like to apply to me because
they have always scoffed at the project from its com-
mencement. . . . Many will not move unless in a string. . . .
At present (1820) there are not ten sheep-breeders pur-
suing any measure for the improvement of Wool and not
more than six of them that pursue judicious ones. ”* He
even sought to push upon government, through its grants
of stock to new settlers, the work for which his powers of
persuasion fell short. “I wish to God”, he communed
with young John, “Government could be induced to

^ See Commonwealth Tear Book, No. 20, p. 635 for recent price records.

* Stephen Roberts, Cambridge History of the British Empire, vol. vii (to
appear) , ch. vn, “ The Wool Trade and the Squatters *’ — the best short account
of the period.

* For the attempts to introduce Spanish sheep into the U.S.A. see L. G.
Connor, Report of American Hist. Association, 1918, vol. i, p. loi. As to Britain,
Germany, France and Bohemia, see below, pp. 89-91.

* Macarthur Records^ p. 332.

88 JOHN BULL’S GREATER WOOLSACK

adopt some plan of supplying settlers with Merino Rams
of undoubted purity of blood at a moderate price. ... I
care not what price Government take them at: let them
fix it themselves and let me have the honour and satis-
faction of seeing the universal spread of what I have so
long and so anxiously laboured to establish, and I shall
be satisfied.” Suddenly, in the early ’twenties the tide of
opinion turned in Britain. There was a rush for Australian
land and Saxon Merinos with which to furnish unlimited
and superior raw materials for the woollen and worsted
industries. Army officers, tenant-farmers, younger sons of
the middle class came out to compete in taking up ^‘runs”
with ‘‘currency lads”, surveyors and shepherds-turned-
graziers.

The way to the unlimited expansion of colonial wool
supplies had been of^ned at home only after a sharp clash
of protectionist and free-trade opinion. British flock-
masters had long been dismayed by “the awful fact that
this country which once boasted of its native wool as the
staple commodity. . . has now become wholly dependent on
a supply of foreign wool for its clothing manufacture”.^
This had come about as an indirect result of the rising
demand for mutton and the success of Bakewell and his
pupils in breeding sheep to supply it. From home flocks
whose masters were indifferent to their needs the woollen
manufacturers had turned for fine wool to Spain and the
Continent. Under Pitt’s liberal policy, wool had come in
free of duty from 1784 to 1802. Thereafter a revenue duty
had been slowly raised from y. ^d, a hundredweight to
6s, 8d, in 1818, Post-war protectionism, listening to the
cry of the woolgrower for higher prices, imposed in 1819
a heavy duty of 6d, a pound on foreign wool. Colonial
wool was admitted at a duty of id, a pound. The duty on
foreign wool caused a contraction in imports of raw
material and in exports of woollens. In 1825, when

^ J. K. Trimmer, Improvement of British Fine Wool (i8a8) (Mitchell
Library). Cf. p. 78.

JOHN BULL’S GREATER WOOLSACK 89

Huskisson codified the Customs, high protection gave way
to a revenue duty of i^., subsequently \d.y a pound, and
the banked out supplies of foreign wool came in with a
rush. No doubt, as Earl Stanhope complained,^ the price
of English wools fell in sympathy with those of the fine
wools imported. But a wider public than the beneficiaries
of an artificial dearth of wool, to whose interests the noble
lord appealed, stood to gain by the freeing of trade. The
high cost of raw materials during the five years of restric-
tion had cramped the woollen industry and raised cloth-
prices to the loss of both consumers and exporters.^
British flock-masters had long known the manufacturers’
needs of ‘‘quality wool” but had followed other ambitions.
In the eighteen-twenties they weli knew of the waning of
Peninsular supplies and of the attempts to acclimatize
Spanish wool abroad.

One of them had watched Saxon and French attempts
to divert from Spain the fine wool industry without being
much impressed thereby. He urged that Southdowns im-
proved by Merino rams would make a safer, and a British,
base for its continuance. The chance, if it ever existed,
of acclimatizing fine wool in Britain was not taken.
A joint production of mutton and coarser wool paid
better. But Australian pastoralists, though without ex-
perience of their own, were quick to seize the lessons of
failures and changes, and to exploit a more favourable
climate elsewhere.

Spanish wool had been grown by unchanging and
traditional methods. Flocks ten thousand strong had
been guarded by head shepherds, each aided by fifty
assistants and as many dogs. According to the season,
they were conducted north or south, from mountain to
plain, travelling about 2 leagues a day. The dogs of
mastiff type more than matched in size and strength the

^ In his Letter to the Owners and Occupiers of Sheep-Farms (1828) (Mitchell
Library) .

* See James Bischoflf, The Wool Question Considered (1828), p. 84.

90 JOHN BULL’S GREATER WOOLSACK

wolves against which they defended the flocks; the sheep
were trained to gather to them at any alarm. As a rule
the sheep were folded till the dews were gone. Lambs’
tails were cut and their noses branded. The sheep-owners
shore their flocks unwashed and sold the wool in the grease.
Dealers washed and sorted it at river-side establishments,
and packed it for export in bags holding about two
hundredweight. After shearing, the ewes were housed
from the night cold in narrow ‘‘sudatories”, and crowded
so closely that they perspired freely, the aim being, it was
said, to make the new wool softer.^

In Germany and France several flocks of Merinos had
been established during the age of the Enlightened Despots,
notably in Saxony and Bohemia, and also at Rambouillet
in France, by Louis XVI . The Saxons had coddled and
housed their flocks t^^ safeguard them from lung troubles
in a rigorous winter climate. The delicacy of un-
acclimatized constitutions may have increased with the
in-breeding of small and isolated studs . ^ The wool produced,
however, had scored heavily with British manufaeturers
owing to its fine texture and “kindness” to the touch.
This “kindness”, which gave a “small face” on the
finished cloth, was produced by washing the wool on the
sheeps’ backs and allowing the “yolk” to rise again.
Fine as was the Saxon wool. Trimmer thought the Saxon
Merinos a puny race, growing but half the weight of wool
yielded by the stock from which they sprang. Yet at the
close of the wars (1814), Britain imported 3,595,146 pounds

^ See J. K. Trimmer, Improvement of British Fine Wool (1828) and Thomas
Southey, Observations addressed to the Wool-growers of Australia and Tasmania,
2nd edition (1831) (Mitchell Library).

2 Thomas Southey, 0/?. aV., quotes an account of the introduction of Spanish
sheep from Moravia to Graf Hunyadi’s Hungarian estates, which emphasizes
the minute care taken of them. “Out of 17,000 sheep there is not one whose
whole family he cannot trace by reference to his books. The sheep are driven
under sheds when it rains or the heat is oppressive. They always lamb in
the house, the ewe being placed in a little pen by herself. One shepherd
looks after every hundred sheep.”

“A little barley-meal should be placed in the water-trough to increase
the ewe’s milk. Ewes failing in milk should be given meal and salt in water.”

JOHN BULL’S GREATER WOOLSACK gi

from Germany, while the Spanish supply was stagnant at
gj million pounds. By 1827 German supply had grown
six-fold to over 22,000,000 pounds, while the Spanish quota
was down to 4,349,643 pounds.

According to Trimmer, French armies had seized 200,000
Merinos during the wars, and had spread the blood
far and wide through France. But on inspection, the
Rambouillet stud-flock pleased the English flock-master
no more than the Saxons did. The French Merinos, albeit
large in frame for that breed, seemed “the most unsightly
flock of the kind he had ever met with”, their fleeces
deformed with the most exaggerated wrinldes. “If such
be the victory” over his smaller but neat Southdown-
Merino flock, close in body as in fleece, “I am well
satisfied with my share in the defeat.”

His plea for breeding fine wool in Britain came too late.
The war-time demand had been for mutton and coarse
clothing wools. War had been more usual than peace in
the previous half-century, and Bakewell, with his improved
Leicesters, had shown British graziers how to meet its calls.
The great breeder had even talked of preferring a breed
without wool, his great aim being mutton and fat, which
in his day was produced six inches thick on the sheep’s ribs.

Woollen manufacturers, watching the decline and pro-
gress of Spanish and Saxon supplies, noted with joy the
improving colonial wools. Here was a supply where*
mutton could not long be a distracting factor. The colonial
market for it must soon be glutted. The loss of the pre-
ference of 5^. a pound in 1825-6 coincided with a drought
in Australia and accentuated the financial troubles con-
sequent on a stock boom in the year following. But by
this date admiration for colonial wools had become vocal
before Parliamentary committees. A Blackwell Hall factor
reported them “more sought after than any other des-
cription”,^ and a London merchant spoke of the cloth
they made as beyond equal “for fineness of texture

^ H. Hughes in evidence before a House of Lords Committee, 1826.

92 JOHN BULL’S GREATER WOOLSACK

and softness of quality. Equal to the wool of any country
and of any time, it has the strength of wool with the
softness of silk”. Two million pounds of it were said to
have arrived that year, and sea transport was no longer
held a handicap. Some claimed they could bring wool
home from Sydney or Hobart Town at less cost for carriage
than from Vienna or Leipzig.

Van Diemen’s Land graziers made most rapid progress
at first. The lands in the eastern half of the island were
open and accessible through the Derwent and Tamar
estuaries. The climate was that of South Devon and
Cornwall in the river valleys, of a sunnier Scotland
on the mountains, snow-clad during the boisterous
Southern winter. While Governor Macquarie was short-
sightedly spoiling his emancipists, Lieutenant-Governor
Sorell grasped the magnitude of McArthur’s idea. Early
in 1820 he bought 300 of the Camden Ram Lambs at
five guineas a head and induced the island settlers to use
them by an offer of prizes for the finest wool.^ In the late
’twenties, the Van Diemen’s Land Company obtained
350,000 acres in the north-west of the island, and spent
;^40,ooo on introducing the finest Saxon Merinos and
over 1 00,000 on the development of its properties.
A smaller company, the Van Diemen’s Land Establish-
ment, spent 5(^40,000 on its lands around Cressy near
Launceston. Its stock maintained a high repute for many
years, although the Establishment collapsed. The Van
Diemen’s Land flocks increased from a doubtful 182,000
very ordinary Teeswaters in 1820 to 663,000, virtually all
Merinos, in 1830. Backed by Sorell’s guarantee to buy all
wool at 4^/. a pound, the export from Van Diemen’s Land
exceeded in the late ’twenties that of all the mainland
runs.

‘‘ Vandemonian” stations, however, were all too ac-
cessible. “Bolters”, as escaped convicts or bushrangers

^ Sorell to McArthur, 4 February 1820, Macarthur Records, pp. 343-4.
Only half of the rams were successfully landed in Hobart Town.

JOHN BULL’S GREATER WOOLSACK 93

were first called in the island, became an intolerable
plague.^ Sheep-stealing was all too easy where flocks
numbering hundreds might be driven off in daylight into
secluded glens of the Eastern or Western Tiers, the brands
blotted at leisure, and the sheep sold at the other end of
the island with small chance of detection and less of
punishment. The nearest criminal court was in Sydney.

When in 1824 the colony was separated fi'om New South
Wales, it received a court of its own. Its first Governor,
Colonel George Arthur, ruled in despotic style for twelve
years. By sheer assiduity he hunted down the bushrangers
and maintained a semblance of discipline. The capture of
Matthew Brady in 1826 ended the days when a “Governor
of the Ranges” affected to correspond on equal terms with
the “Governor of the Town”. Arthur prohibited the pay-
ment of wages to assigned servants and relied on watchful-
ness to maintain control of the prisoners. Though these
measures might prevent the worst excesses, they had in
them no germ of improvement; the mountain glens were
still fatally accessible. Such advantages as the river valleys
had possessed for English agriculture^ were discounted
by the lack of appropriate town markets for its mixed
products, as well as by the presence of such evils as thieving
natives and bushrangers. When the Hunter Valley in New
South Wales was settled, and good seasons came to that
colony again. Van Diemen’s Land slumped. Similar

^ Sec Calder MSS. (Melbourne Public Library), vol. i, pp. 83, 132;
H. R. of A. series m, vol. iii, pp. 252 et passirriy Hobler MSS. (Mitchell Library),
voLs. I and ii, and article on “Michael Howe”, Australian Encyclopaedia, i,
p. 630.

* See Hobler MSS. (Mitchell Library), vol. ii, pp. 133 seq, for George
Hobler’s account of his little farm at Killy-faddy outside Launceston, in
1826. He congratulates himself on his 150 acres of fine meadows, into
10 acres of which he has dibbled roots of sweet scented vernal grass. This
he thinks will give the hay a scent that will puzzle “the natives and cockney
farmers”. Apple trees, quinces, peaches, almonds, apricots, plums, cherries,
gooseberries, raspberries and strawberries are planted in his orchard, and
“several thousand forest trees in the seed bed and nursery” are ready.
Of 50 acres cleared for cultivation, 30 are ploughed and part sown. He is
preparing to plant sweet-briar hedges under the “dead fences” and has
“three bushels of haws of colonial growth”.

94 JOHN BULL’S GREATER WOOLSACK

episodes of quick prosperity were to recur in the ’fifties
and ’eighties, in reflection of mainland booms. But her
neighbours so surpass Tasmania in climate and fertility
of soil that the island has never been able to hold back
its energetic sons from crossing the straits. Hobart news-
papers were complaining in 1826 of artisans and mechanics
who went off to Rio or Valparaiso. Since Port Phillip
and New Zealand were settled, these nearer centres have
attracted Tasmanians still more strongly.

The concentration of convict-transports into Tasmanian
ports after the cessation of “the system” in New South
Wales (1840) only made matters worse. Four thousand
convicts a year poured into the colony between that year
and 1853, when the system was finally abandoned in
Eastern Australia. Over 67,000 in all had been sent
thither. An official who had entered the service in 1829
shuddered after half""! century at his first memories of
Hobart Town — trough streets of squalid houses, drunken-
ness, robbery and frequent murder. “But the immense
chain-gangs or files, two or three hundred yards long, of
men undergoing secondary punishment, all in heavy irons,
dressed in yellow clothing and closely guarded by armed
soldiers and police, passing along the streets with chains
rattling most dismally all tlie way, were the most striking
sight that caught my eye after landing. My first impres-
sion of the place was that there was nothing beautiful
about it except Mount Wellington and the clear blue sky
overhead.”^ The “better class” convicts manned the
Customs Department as “writers”, receiving sixpence a
day and “board wages”. “Men of this stamp were, of
course, not much to be relied on. They required a very
Argus to keep watch over them in a revenue office.

A few entries in a settler’s diary of October and No-
vember 1829 indicate how the better convicts fared when

^ J. Eskine Calder, in the Hobart Mercury^ 4 June 1879. From their clothing
the convicts were known as ‘canaries*.

* Calder Papers^ vol. ii, p. 98.

JOHN BULL’S GREATER WOOLSACK 95

assigned to private employment. When a convict servant’s
zeal at “burning off” displeases the master, he is taken
to the Police Officer and ordered 50 lashes forthwith.
Within a fortnight comes this eloquent entry: “3 No-
vember: I have now fifteen prisoners who do the whole
of the work of the farm without my paying a shilling in
wages, but how much looking after they require ! G — - — ^1,
the fellow who was flogged well for his idleness, is now
learning to thrash and after this week he shall thrash or
be thrashed, without putting me to the trouble of looking
after him”.i Within ten days he was again flogged 50
lashes “and the chief constable directed to make a new
cat for him”. Within a month the same servant was in
trouble for letting the oxen feed on the wheat-field and
was sentenced to six months in the government gang. Then

“18 December: Surprised by a letter fi^om G 1, from

the chain gang, promising better behaviour if I would
intercede for him and take him back. That I certainly
shall not do”. Criminals driven by such means to un-
congenial tasks not unnaturally chose, whenever the faintest
chance offered, to “go bush” in the hope of at least a
spell of liberty, though in so doing they “put their necks
into a halter”.^

As the great age of squatting dawned in New South
Wales, and as free farmers spread over the Adelaide Plains,
all that could do so fled the ill-omened island whose very
name had become a byword for discord and criminality.
There fell upon it the palsy of inferiority.

On the mainland, where the climate offered a more
difficult problem to those sons of foggy Britain, the
pastoralists’ craft was slowly articulated under the stress
of necessity with many blunders and small successes. “ Con-
sidering ”, wrote one of the pioneers at the end of a long life
of learning, “that they had nobody else’s experience to

^ Hoblcr MSS. (Mitchell Library), vol. 11, pp. 157 et seq.

® Hobler records being “stuck up” by such a bushranger, Bevan, in
June 1829, vol. II, p. 120. His wife’s quickness saved his lil'e.

96 JOHN BULL’S GREATER WOOLSACK

work on, and that hardly any of them had had anything to
do with sheep or cattle or horses in their lives before, they
managed to flounder along and do wonderfully well.”^
John McArthur’s account of how they kept the native
pastures sweet in his day suggests blackfellows driving game.
“The natural grasses are in all seasons rich and abundant,”
he said. (He was always heroic and at the moment he was
persuading » the Privy Council who knew nothing of
Australian droughts.) “When they become too rank they
are burnt off, and are almost immediately succeeded by
a younger and sweeter herbage which the sheep eat greedily
and keep bare.” On alluvial flats, where periodic floods
top-dressed the soil and the constant small tillage of a
myriad hoofs compacted the turf, the spread of European
plants “electrified the country”. On the drier uplands
with a lighter covering, deterioration followed the loss of
humus by such burning. Flocks increased in the favourable
seasons up to the limit of carrying capacity. Then came
the sudden droughts of a warm temperate zone as the
whip and spur of expansion in search of grass.

In the ’twenties and ’thirties, however, all seemed easy
to the young pioneers. With an established repute for the
quality of their product, and an unlimited market as
a result of the release of English manufacturers from
fiscal burdens, the boom in Colonial “wool establish-
ments” was no mystery. Flock-masters and wool-brokers
proffered advice to the new graziers how to tend their
sheep and to prepare their clips for market. Companies
were formed in London to seize on a large scale the great
chance that had so long gone begging at the Antipodes.
Sailing ships, and even an occasional steamer, went rolling
down wind in the roaring forties, their gunwales no longer
lined by the tristful, hopeless faces of convicts, but by
free settlers fired with ambition to make their fortunes by
filling John Bull’s greater woolsack.

^ R. D. Barton, Reminiscences of an Australian Squatter (1883), p. 35.

CHAPTER VII

o ^ o

Pioneering in the Pastoral Industry

IN 1 8 1 5 a party of convicts escaped from the settlement
at Bathurst established by Governor Macquarie for
small expiree farmers, and sought a way to New Guinea
down the Macquarie River. They soon came back, nearly
starved, but telling of endless grassy plains. In 1817
1818, Surveyor-General Oxley traced both Lachlan and
Macquarie Rivers into flooded marshes. Was there an
inland sea beyond? Working back to the coast northward
of Sydney, he crossed rich grasslands on the New England
plateau and Liverpool Plains. In 1820, Wild reached Lake
George, and in the next year Throsby found the Murrum-
bidgee not far from the site of Canberra. Bigge, noting the
attractive climate and foreseeing the accessibility of a
colony on Bass’s Straits, urged a careful survey of the inland
pastures by an expedition from the head of Port Phillip
to Lake George, to be followed by the introduction of free
settlers. Brisbane thought of landing a party of convicts at
Wilson’s Promontory and rewarding with free pardons
all who reached Sydney.

On the saner advice of Alexander Berry, a Sydney mer-
chant, he finally selected Hamilton Hume, a colonial-born
bushman who had shown exploring talent beyond Bathurst,
to lead an expedition south-west from Lake George. With
six assigned servants and Hovell, a ship’s captain who had
opened up the Illawarra country, Hume crossed the Mur-
rumbidgee in October 1824, half-climbed the snow-clad
Monaro tableland, worked round it inland, rafted the
party over a deep westward-flowing river on a dray covered
with tarpaulin, forded more rivers flowing north-west,

98 PIONEERING IN THE

worked west again round rough snow-clad country, found
Kilmore Gap and emerged on an inlet which both he and
Hovell took to be Western Port, but which was actually
Corio Bay where now stands Geelong. When Western Port
was occupied in 1826 by a party of soldiers and convicts,
they found sealers there and some acres of land under
wheat and vegetables.

In 1827 1828, Allan Cunningham, botanizing north

of Oxley’s New England, reached another attractive table-
land, the Darling Downs, and saw a gap through which,
on a second coastwise expedition, he climbed to the Downs
from Moreton Bay.

These successive thrusts over the range had shown that
well-watered grasslands extended north and south for at
least a thousand miles and were approachable through
three or four gaps in addition to the difficult Blue Moun-
tains road to Bathu?st. But how far west did they stretch?
Did their slope in that direction reach the shores of an
inland sea? In winter, rain-clouds banked up from the
west and north-west, yet in September and October, the
southern spring, parching winds regularly blew over the
mountains from the west.

A severe drought between Cunningham’s two journeys
dried up the marshes that had baulked Oxley’s way west-
ward, and Captain Charles Sturt pushed out with Hume
to find the sea to which the westward rivers flowed.
Leaving the reed-beds, they rode over dry plains till they
came upon a stream between high banks trending south-
west, with water too brackish to drink. They named it the
Darling. Sturt saw it again in 1829 when he tracked the
Murrumbidgee by dray, and when more marshes stopped
him, by a whaleboat, brought overland in sections and put
together by his convict servants on the river bank. Making
their way into the Murray and naming it, the party rowed
with the current for 26 days, passed what they guessed to
be the Darling Junction, saw Mount Lofty Ranges in the
dim west, and turning south, emerged in Lake Alexandrina.

PASTORAL INDUSTRY

Finding no relief ship in Encounter Bay beyond the
mighty surf of the Murray Mouth, they rowed upstream
for 56 days on a ration of less than half-a-pound of flour
a day, against a river swollen by flood-waters. Uncom-
plaining, the men fell asleep over their oars. Then they
camped and sent on the two strongest to Wantabadgery
depot for relief which came just as the last ounce of flour
had been eaten. Sturt, a ‘‘verray perfigt gentil knight”
among the explorers, went blind for many months.

Oxley’s successor. Major Thomas Mitchell, was one of
Wellington’s Torres Vedras men, and had envied Sturt the
honour of being chosen to explore the inland rivers. In
1831 he struck north-west to find a great “Kindur” river
of which a runaway convict told native tales. He crossed
the Peel and the Namoi and found the Macintyre. The
blacks called it the Karaula, but there was no sea, nor
light-coloured men seeking scented wood. And the
aborigines stole his stores. In 1835, working west-north-
west, he reached the Darling and built a stockade at Fort
Bourke. Thence he followed the flowing river through well-
grassed land, but not to the Murray. When he knew that
Sturt had guessed right, he turned back. In 1836, however,
he went from Orange down the Lachlan and Murrumbidgee
to the Murray-Darling junction, reascended the Murray
to the Loddon, traced it south, crossed to the Grampians
and the Pyrenees and followed the Glenelg to the Southern
Ocean. Peninsular names — Nivelle, Arapiles, Trafalgar —
still mark his route across “Australia Felix” as he named
the fertile Wimmera and western districts. He marched
back from the Glenelg in military order, and his cart-
tracks, “the Major’s line”, became the route by which
Sydney-side stockmen made their way overland to Port
Phillip district. But “in this Eden” he was not, as he
supposed, “the only Adam”. His little column was drawn
to the coast again by a glimpse of Edward Henty’s farm
and whaling station on Portland Bay. And on 30 Sep-
tember 1836 from the summit of Mount Macedon he made

7-2

lOO

PIONEERING IN THE

out, at the northern corner of Port Phillip, “a mass of
white objects which might have been either tents or
vessels”. It was the beginning of Melbourne. Batman and
Fawkner, both young colonials, the one a blacksmith-
settler and the other a journalist of rebellious habit, had
been there for six weeks, founding from Launceston an
unauthorized base for the settlement of Port Phillip
district. They had discovered the scene to which David
Collins had shut his eyes when in 1803 he lost heart at
Sorrento and fled to Van Diemen’s Land.

Sturt’s heroic boat journey and Major Mitchell’s recon-
naissances proved that wide inland horizons lay before the
quiet battalions already being deployed through the gaps
in the ranges. Their occupation of “runs” and “stations”,
spreading out fanwise to north, west and south-west, was
the first detailed exploration of the land.

No General Ordfers directed their advance. On the
contrary, in October 1829, Governor Darling had marked
out nineteen counties in a rough semicircle around
Sydney and had forbidden settlement beyond their
boundaries. His gesture only demonstrated the waning
power of the Sydney government in economic matters.
Ten years later, there were 694 holdings between the
Gwydir and the South Australian border, and the rush to
take up runs in Port Phillip and its wonderful Western
District was fast gaining momentum.^

The adventure of taking up a run has been incomparably
described by Professor Stephen Roberts.^ “A man of
small capital acquired a flock and simply set out. . . . Each
was a land-freebooter scanning the horizon for unoccupied
or unclaimed land. He was an ‘overlander’, nursing his
sore-footed flock, watching every pinch of flour in his
bullock-dray of rations, and looking for his plains of
promise or his long-dreamt of mountain-pastures. Over

^ See S. Roberts, History of Australian Land Settlement , ch. xiii, on “The
Tracks of the Squatters”.

* Appearing in Cambridge History of the British Empire, vol. vii, ch. vn.

PASTORAL INDUSTRY

lOI

the desert and the mountains, over the sun-baked plains
and the flooded marsh-lands he went, either seeking some
vague landmark dimly hinted at by a previous explorer
or one of his rivals or, more often, trusting to his destiny,
and his bushman’s sense to find virgin country in the
general direction in which he was moving. . . . He kept on
despite distance and drought, starvation and disease,
attacks by the blacks and desertions by his men. He was
staking everything, often his life, on finding a suitable
‘run’ for his sheep, and until he reached this haven,
nothing else counted.”

When Darling set his limits on the official maps he
meant to take control of this pastoral expansion. An un-
licensed occupation of Crown land within and beyond
“the limits of location” was stultifying the issue of his
new annual grazing licences over defined runs. Yet
within a few years, a greatly swollen majority of the
graziers in the colony were “squatters” who had placed
their “stations” wherever they could find room, regardless
of a government which hardly existed beyond Bathurst.^

The new economy did not establish itself without two bad
stumbles on the part of the new directing class, the booms
of 1826 and 1838-9 and the financial crises which followed
them. Yet each of these episodes served to emphasize the
importance of the pastoral industry, for each arose through
the failure of the leaders of the free community to justify
their leadership by a single-minded activity in developing

^ When first used in Van Diemen’s Land the term “squatter” had the
same contemptuous ring in Australia as in America, and it long retained
a suggestion of criminal origins, at least in the cars of the “pure merinos”
or free settlers. “Station” originally meant a folding place where the sheep
were shut up at night as a defence against dingoes or “warrigals”. The
transition to the later use may be seen in a letter dated 12 May 1830 in
the Hogan MS. (Mitchell Library). The owner of Guttawally writes of
“going up the country in about three weeks and then we will settle where
the different stations are to be”. But the whole run is already known as
“Guttawally Station” as well as “Guttawally Establishment”. This older
name “Establishment” and the ranks of superintendent and overseer which
still survive on the stations may be traced at Emu Plains Agricultural
Establishment in The Adventures of Ralph Rashleighy pp. 88, 93, 94.

102

PIONEERING IN THE

that industry. In each instance the crash of speculation
drove men back to hard work on the main task which
they had thought to leave to others.

The first boom may best be described as it appeared to
the critical eyes of John Dunmore Lang, the fiery Scots
parson whose zeal for Australia, though marred by a
bitter sectarianism, burned with a flame that consumed
many a ^am during his long life in New South Wales
(1823-1878).’ “The Australian Agricultural Company
commenced operations in 1826.® As cattle and horses had
to be purchased for the company wherever they could be
got the price of agricultural stock rose rapidly throughout
the colony, insomuch that cattle of colonial breed were
actually sold to the company’s agent for twelve guineas

and sheep for four or five guineas a head No sooner

had the existence of the A. A. Company been announced
and its operations dbmmenced in right earnest than the
sheep and cattle mania instantly seized on all ranks and
classes of the inhabitants. The mania impelled whom-
soever it seized to the cattle market Barristers, attorneys,

military officers of every rank, civilians of every depart-
ment, clergymen, medical men, merchants, dealers, settlers
were there seen promiscuously mingled together every
Thursday outbidding each other in the most determined
manner for the purchase of every scabbed sheep, scarecrow
horse or buffalo cow in the colony that was offered for sale.
It was universally allowed that the calculations of the
projectors of the A. A. Company could not be inaccurate.
It was made as clear as daylight to the comprehension of
stupidity itself that the owner of a certain number of sheep
and cattle in New South Wales must in a certain number
of years infallibly make a fortune. It was determined on
all hands that the A. A. Company should not be the only
reaper of this golden harvest. . . .

“In all cases where the purchaser had money to pay

> A short biopaphy in the Australian Eruyclopaedia, vol. i, p. 719, gives a
fair outline of his career.

* See S . Roberts, History of Australian Land Settlement, ch. vi, and Appendix i.

PASTORAL INDUSTRY

103

for his sheep and cattle money was paid. Where money
was not forthcoming, as was generally the case, credit was
allowed. ... It was not at all to be wondered at that
persons who were to be so speedily enriched beyond their
highest previous expectations should begin to speculate
prematurely. Articles were accordingly ordered and bills
given for their payment and so favourable was the prospect
of demand for the future that colonial merchants or im-
porters were induced to order large quantities of British
and other foreign goods till their warehouses were filled
and almost every article of British manufacture could be
obtained in Sydney at a cheaper rate than in London,

“It pleased Divine Providence to visit the colony in the
midst of these speculations with an afflictive drought of
nearly three years continuance, the effect of which, com-
bined with the natural result of the sheep and cattle
mania, was to open the eyes of the colonists to their own
folly and madness, to blast the golden hopes of thousands

and to bring many families to poverty and ruin Month

after month herds of cattle and flocks of sheep were seized
and sold for the payment of debts incurred by their original
purchase. .. .The ruin thus experienced in all directions
was just a little less extensive than the mania which had
originally caused it. Those who had commenced with
capital found that they had lost it in great measure. Those
who had salaries found that these must in future be ap-
propriated for the payment of debts which their own
cupidity and infatuation had led them to contract. Those
who had neither capital nor salaries at the first had their
property brought to the hammer and themselves to
poverty or prison.”

During 1830, although the rate of interest allowed by
law was only eight per cent., twelve, fifteen, twenty and
even twenty-five and thirty per cent, interest was obtained
to meet the urgent necessities of individual settlers.^

^ Dr Langes description is quoted by Edward Pulsford in his Risey Progress
and Present Position of Trade and Commerce in New South Wales, written in 1893
for the N.S.W. Commission to the World’s Fair at Chicago,

104

PIONEERING IN THE

In 1838 there was for a second time speculation, such as
marks the adoption of any new and promising expedient of
economic advance, on the increase in stock and land values.
The population of the colony had grown from 30,267
in 1827 68,795 1838. Old and new colonies were

expanding rapidly in Van Diemen’s Land and South
Australia. ‘'New chums” were again buying up flocks
and herds^ without the experience necessary to calculate
the income they could be made to yield. The proceeds of
government land-sales at Port Phillip and at Sydney were
being used to bring out numbers of assisted immigrants.
Graziers were tempted to believe that high prices and
abundant labour made big profits certain. Again there
was a fevered zeal to buy stock and equip stations.
Speculators “put it about” that land values must rise still
more. On the wings of hope the reckless soared into the
inane. >>

In 1839 the Government announced that the price of land
would be raised to 12s, an acre as soon as the 300,000 acres
of land already offered at 5^. had been sold. The authorities
thought to check the speculative buying of what was
deemed cheap land. Their action had just the opposite
effect; men rushed to buy at five shillings what would soon
be worth twelve. Auction sales of Melbourne town allot-
ments realized 3 1,000 in 1838, £1^2,000 in 1839 and
3(^313,000 in the first ten months of 1840. Some allotments
that had been sold in 1837 brought within three years
eighty times what had been paid for them. Even in the
proposed suburbs of Melbourne, a twenty-five-fold increase
was not unknown. Private re-sales were made on credit,
the amounts outstanding to bear interest at ten per
cent. To finance this gambling in title-deeds there was
general borrowing on the collateral security of land at the
inflated prices. Payments of town wages and for govern-
ment land were the only occasions for the use of cash.

New banks were competing for a footing in this land of
the golden fleece. At the beginning of 1834 there were

PASTORAL INDUSTRY

105

only two colonial banks — the Banks of New South Wales
and of Australia, the latter having been founded in 1826
on an unlimited liability basis with a capital of ^{^400, 000.
In 1834 the Commercial Banking Company of Sydney
opened its doors and the Bathurst Bank was founded in
1835. These were followed by the Bank of Australasia and
the Chartered Bank of Australasia in 1836, the former of
which boasted a capital of ;;(^400,ooo, and by the Union
Bank of Australia and the Sydney Bank in 1839. By that
year the total capital of the banks serving the colony’s trade
in Sydney or in London was over :;{^2,300,955. In 1841 out
of their total assets of ^^3, 050, 000 the banks held ^^2, 610, 000
in discounted bills. London merchants in haste to make
money out of such a well-provided community poured in
on consignment masses of goods, largely luxuries. Governor
Gipps marked the profusion in which all classes were
living by declaring that around Melbourne the country
was ‘‘strewn for miles, almost for hundreds of miles, with
champagne bottles”.^

As the pressure increased, rates of interest as high as
15 per cent, were promised, but, unless the prices at which
title-deeds changed hands continued to soar steeply, such
rates would soon ruin speculators using borrowed funds.
In 1839 financial stringency in London checked the flow
of capital to Australia. In the new province of South
Australia land sales and credit collapsed, and “scourging
drought” in New South Wales from 1838 to 1840 ac-
centuated the mistrust felt in England about the future of
all the colonies. Within the colonies, the drought under-
mined credit by forcing heavy exports of coin to India,
Java and Chili to pay for rice, maize and wheat. Governor
Gipps relieved the banks’ need for a time by placing on
deposit with them the cash it had been customary to hold
in the Treasury, but the cessation of land sales soon forced
him to call up his deposits. A quarter of a million was
withdrawn between July 1840 and November 1841 to pay

^ T. A. Coghlan, Labour and Industry in Australia^ vol. i, pp. 473 et seq.

io6

PIONEERING IN THE

the public service. Heavy payments by government of
bonuses to assisted immigrants came due as the delayed
result of activity in sending them out during the boom
period. The banks called in advances and stopped all
‘‘cash credits”; spending ceased, save on bare necessaries.
The regular merchants found their business paralysed by
the sale of speculators’ consignments at auction without
reserve. ]^anks which nursed trader-clients whose stocks
were unsaleable only added to their losses. Farmers and
pastoralists who offered bullocks or wool in payment for
stores had to sacrifice them on a glutted market into which
all were forced by drought. Sheep had brought 35^. a head
in 1839: in 1843 they were sold at “sixpence a head and
the station given in”. Horses worth ^^£^0 to for the
commonest hack” in 1839 went for in 1843. cattle
went at 505*. as compared with 10 to 3(^12.

Settlers, merchants, storekeepers and working house-
holders were alike glad of the shelter of a new Bankruptcy
Act passed by Council in 1842 at the instance of Judge
Burton. It left debtors their freedom on condition that
they surrendered their estates to their creditors. The
estates as a rule fetched little. When in 1843 the Banks
of Australia, Port Phillip and Sydney failed, the assets
of the first, in which many leading colonists had already
lost their share-capital, were liquidated by a lottery — the
only way that would attract a little cash.

Financial oracles, including the majority in the Legis-
lative Council, were insistent that the Governor should
“stem the tide of disaster” by issuing new cash, notes
backed by mortgages on land. The distant Colonial
Office, however, put a veto on such heterodox money.
But out of “the Bad Times”, as these years of despair were
long called, came two expedients that helped the insolvents
set free by Burton’s Seisachtheia to find their feet again.

To start wool-growing the first requisite was a waggon-
load of stores and some sheep with which to make the
westward march. How could pastoralists give security for

PASTORAL INDUSTRY

107

payment ? They had no land, and in any event it was almost
unsaleable. In September 1843 Council was

passed permitting banks to lend against liens on live-stock
and wool. Again the Colonial Office demurred. It relied
on London ideas of sound banking, the first rule of which
was that the banker must draw a firm line between com-
mercial bills and mortgages on property. Bills, to London
financiers, had behind them goods on their way to con-
sumers. Before the bill was due, the sale of the goods would
put the drawee in funds to meet his obligation. Land
might be drought-stricken: movable property might
prove sterile or perishable. In a crude new country,
however, such bills were not to be found. Behind the best
of the bills which the banks had discounted during the boom
the assets were often land, stock and wool; and if banks
could not or would not lend on such security they would
not lend at all— their capital would lie idle. The Council
stood its ground and the Act was maintained against every
threat of disallowance. As it had already given the relief
intended, the Colonial Office let well alone. In finance
accomplished facts must be respected.

The other saving expedient was boiling down sheep for
their tallow. This was first tried by Henry O’Brien of Yass
as an escape from scab^ and from the ruinous prices which
sheep were fetching. When the tallow from a sheep was
worth four or five shillings and the English market for
it was firm, the boiling down vat, however wasteful of
good mutton, was an effective retort to bids of 6^/. a head.
In 1844, forty-four boiling-down plants rendered 350,000
sheep into 48,758 cwt. of tallow. The maximum output
233,757 cwt. from 1,700,000 sheep in 1850. As the
demand for stock revived, the need of this gruesome last
resort quickly passed. “The value of the discovery”,
thought Sir Timothy Coghlan, “lay more in its effects

^ On this highly contagious disease and the obstacles which long hindered
its suppression, see E. M. Gurr, Scab in Sheep, Melbourne 1865. The annual
loss caused in Victoria alone for many years was £500,000.

io8 PIONEERING IN THE

upon men’s minds than in the actual use to which it
was put.”

The ruin brought on many by their boom-time pro-
jects forced them to work again as active producers. The
result was a spurt in exports almost as prompt as the
decline of imports. The latter fell away from ^3,014,189
in 1840 to 5(^931,260 in 1844, in which year exports sur-
passed in^ports for the first time in the colony’s history,
being worth 3(^1,128,115. New production was attempted
along many lines. George Hobler contrived to make
champagne on his Hunter River property, but rain spoiled
his vintage, and the boom thirst did not revive. Then he
tried fresh fruit, but the Sydney market was too soon
glutted, and the vigneron “determined to make raisins for
our own use”. “ It is a most uncertain country for agricul-
tural, pursuits” he reflected. “The day before the rain
commenced the cort! seemed to be scorched up past all
help. Now there is every appearance of a good crop which
may have the effect of making it all but unsaleable. Prices
now are about 3^*. Qd, for wheat, 2^. to 2S, 6d. barley,
IS, 6d. maize, 45 j". hay, butter gd, and meat The

only way, he found, was to persist with wool and tallow.
Stores were cheap and there was still plenty of labour
competent to run sheep after the fashion which suited
a semi-nomadic economy.

Many descendants of the pioneers hold firmly to
“Banjo” Paterson’s faith

That nothing in the ages old
In song or story written yet,

On Grecian urn or Roman arch.

Though it should ring with clash of steel,

Could braver histories unfold
Than this bush story yet untold.

The story of their westward march.

Others in Australia would reduce the merit of the pioneers
to the sheer luck of having been the first favoured few

^ Hobler MS. 1844 (Mitchell Library).

PASTORAL INDUSTRY 109

with flocks and herds to drive into rich empty pastures.
There they had but to watch wool grow and numbers
multiply while the excluded many, equally capable, did
all the hard work. Either view is imaginative and false.
The true “story of their westward march”, as revealed in
the diaries and memoirs of its participants, is no epic of
disinterested bravery. They waged no public war, but
each devoted his slender resources to a more thorough and
truceless conquest— the occupation of land by a new
economy. What drew them to Australia was not quest of
glory, but the main chance of making good a family’s
foothold in a new and, as they held, unused land. It was
neither child’s play nor high romance. And the measure
of their deserts and their success hi comparison with those
of the workers they employed was the measure of their
courage and endurance.

Anthropologists still protest at their and our “neglect”
of the aborigines — and even active extermination of them.^
They ask for the native a few crumbs from the proceeds
of a more provident use of his country, and for authentic
reserves in which the “outback” survivors of its primitive
huntsmen may maintain themselves as of old. This is both
just and, for the high purpose of knowing the taciturn
mind of an archaic race, also wise. But there was and
there can be no consistency between a hunting and a
pastoral use of land and beasts. The blacks’ morale and
their elaborate code of honour crumbled as the squatters
and their servants drove multitudes of strange beasts across
the tribal boundaries, shot down warriors and the native
game, even those tabooed to the tribe, ensnared the gins
and children into dishonour and drudgery by gifts of
rum, tobacco and flour. In numbers the older race was
too weak, in organization too divided, to resist a folk who,
despite their still feebler numbers, had food in plenty,

' Sec F. Wood Jones, Australian Association for the Advancement of Science,
Perth 1926, vol. xvin, pp. 497 et set]., a restrained and powerful statement
of the claims of the Australian Aborigines.

no PIONEERING IN THE

weapons of incomparable power, and a ruthless mutual
loyalty.

A tribe could for a time be formidable to a solitary
pastoral household or an isolated hut, with stores half-
watched and flock unyarded and astray. But their half-
instinctive ‘‘duffing” from the newcomers’ abundance
would soon or late be answered by a “rounding up” and
“dispersai” of the blacks in the vicinity of the “theft”.
Of the survivors, a few proud old men might stand aloof
still living on game and grubs, their only belongings a
few skins, spears and firestick. Outwardly scornful, their
hearts were benumbed with broken memories and despair.
The youngsters, laughing at the defeated spirit and
traditions of their elders, accepted the white man’s food
and excitements, rode his horses, even wore his uni-
form, and as native police tracked down their fellows.
The old hunting Skill of the blacks was thus fatally
domesticated and turned against the “myalls” or un-
tamed blacks on the edge of pastoral occupation. But
disease thinned off with hideous rapidity the domesticated
blacks, and no disagreement between the whites regarding
their mutual rights to the land prevented their joining
to treat the myalls as vermin whose destruction was to be
achieved by any means, from shot-guns to poisoned
damper.^

The squatters and their servants came by degrees. They
used the land in a pastoral economy, demanding, above all,
security from the hunters’ spears for their beasts and from

^ For an account of the massacre by blacks of a benevolent squatter
named Wills, and his household, at Gullin-la-ringo in the Comet country,
Queensland, i86i, see Nisbet MS. Mitchell Library. Another pathetic
murder was that of a small squatter, Maclarcn, stalked all day and slain
close to his hut near Gurumbah, after he had put down his gun and gone
back for some sick sheep, while his family sat waiting for “tea”. In
Christison of Lammermoor, chs. viii, ix, x, and on pp. 226-8, may be read the
methods and difficulties of an exceptional squatter who “worked in with”
the blacks. “ Kurry used to be as shy as a frightened fawn with white people.. ..
A few years later in Hughenden town nobody would have recognized the
shy pretty girl in the drunken woman screaming larrikin filth at a half-caste
urchin.”

PASTORAL INDUSTRY

III

his firestick for the grass. They obtained it, occasionally
by bribing and befriending the blacks, usually by brutal
intimidation. Then disease and the depression of manifest
impotence wasted the survivors all too rapidly for the
squatters’ liking — for they had found in the young blacks,
who were handy with stock, a supply of docile and cheap
labour. In undisputed possession, as far as the spearmen
were concerned, the squatters pursued their plans, watch-
ing over, cajoling and shepherding the white shepherds
whom they set to watch their “faint flocks and herds”.

Their care was made fruitful, their isolation tolerable,
by a regular exchange of goods at the coastal ports
between “bullock waggons toiling down to fetch the wool
away” and sailing-ships bringing cargoes of clothing and
hardware over the tumbled Southern Ocean. Individuals,
“undirected by the fostering care of government”, de-
veloped the pastoral industry which still remains the
principal activity and support of the white man’s Australian
economy.

CHAPTER VIII

Shepherding and Marketing

V /OOL-FARMING”— the term is John
\Ji/ McArthur’s — called neither for skill nor as-
V V siduous labour. It adjusted itself to the
quality and quantity of the human material available.^
Shepherds and hut-keepers were placed at the various
‘‘stations” on a run, in deliberate isolation from the
temptations to which they had formerly succumbed. In
the days of open boundaries, a run was simply a string of
such stations stretchttd out over perhaps forty miles of
country. The overseer was expected to visit each in its
turn, taking the men their rations, tobacco, newspapers
and any other odds and ends they had bespoken from the
“headquarters” store. He would count each flock and,
of course, discuss the state of feed and water. This in-
cessant round with rations was “a dingo’s life” for the
overseer, but the existence of the shepherds and hut-keepers
at the stations was a soul-destroying monotony. Seldom
or never had they the resources of mind from which to
build an inner life to compensate for the loss of Sydney’s
gregarious pleasures.

A slab-hut with a stringy-bark roof, rough-hinged flaps
in lieu of windows, a mud floor, a packing-case table,
seats made from split logs, and beds, if any, of bush saplings
and hessian, was their home. Often a blanket on the floor
and a saddle for pillow served as “shake-down”. Pasted
on the walls might be a few fly-specked cartoons from the

^ The convict, according to Dr Lang, “is better clothed, better fed, and
better lodged than three-fourths of the labouring agricultural population
of Great Britain and Ireland. While at the same time his labour is beyond
ail comparison much less oppressive”.

SHEPHERDING AND MARKETING 113

satirical press, or coloured prints from the Christmas numbers
of the “weeklies ”, usually representing famous race-horses.
No enclosure surrounded the hut, save when an excep-
tional hut-keeper had put in a few pumpkins or cabbages.
“In dry weather dust, in wet weather mud up to the
uncertain line at which bush ended and house began”
made “a home little better than an animal’s lair” and
equally attractive to flies and vermin. For heaps of sheep’s
dung stood feet high at older “stations”, and the dam or
river near-by made admirable breeding-places. To light
a candle indoors in summer was to fill the place with
mosquitos. The only way to escape them was to sit or sleep
in a smoke from smouldering cow-dung so dense that it
weakened the eyes’ resistance to “sandy blight”. Just
before daybreak the mosquitos would stop, but at dawn
the flies were up for the day. “You can seldom lift a
piece of food to your mouth without one hand driving
away flies to make room for it. Anything like gravy in
your plate is a sort of fly-trap and most successful in its
operations. Fleas are as abundant as may be expected
from floors of dust and so many dogs about, cats and
parrots, and the thermometer indoors usually from 90° to
ioo°”.i Any abrasion of the skin tended to fester. The
flies helped to spread an infectious condition known as
“Barcoo rot”.

At “headquarters” the squatter or his superintendent
might enjoy the co-operation of wife and family in fighting
such discomforts and maintaining some amenities of life.
But in the first pioneering the menfolk were often, from
choice, “roughing it” alone.®

Station labour came from four sources — “old hands”,
“wild colonials”, “new chums”, and, a little later, ex-

1 Hobltr Papers (Mitchell Library), vol. v, p. 4, at January 1847, on the
Lower Murrumbidgcc.

* Sec M. M. Bennett^s Christison of LammermooTy p. 1 16: “They ate portu-
lacca to keep off scurvy and made tea with wild marjoram. ‘ It’s a hungry
place, Lammermoor’, a traveller told a neighbour. ‘Nothing to eat but
pigweed and mutton. No flour. No stores of any description * ”,

II4 SHEPHERDING AND MARKETING

diggers. They had small chance of family life. A disparity
in numbers between the sexes persisted in extreme degree
until the ’fifties, especially up country where the squatters
for pastoral reasons looked askance upon ‘‘encumbrances

“Old hands” formed the vast majority of the shepherds
and hut-keepers. Such callings suited the mentality of
many sent out for trying to live without working. They
were “found” with rations adequate for fairly valiant
trenchermen, the customary scale being 8 or lo lb. of
flour, 10 to 12 lb. of meat, 2 lb. of sugar and a quarter
of a pound of tea per man per week. In addition, wages
were “allowed” at rates varying from year to year, but
seldom in pre-gold days above £2^ per annum for shep-
herds and £20 for hut-keepers. Against these amounts
were charged all clothing and extras drawn from the
headquarters store. When, at long intervals, the victims
of monotony announced themselves “dead sick of it” and
“wanting a spell”, the balance to their credit would be
paid in the form of a cheque on some distant bank,
probably in Sydney. Most of them were expirees too
weak in initiative to take up land grants or, when grants
ceased, to work at city or farm wages till they could buy
“blocks”. The rations-and-cheque system offered such
men no escape from degradation, no real chance of self-
respect.

Rations had been issued continuously from the days of
assigned service. The issue of them set up in the minds of
the old hands an implicit belief that so long as they “kept
out of trouble” their animal wants would be supplied with-
out forethought or exertion on their part. Rations to the
“sundowner” seeking a place seemed to them one of the
rights of man. To the squatter they were a kind of in-
surance-premium; for a disgruntled swag-man could so
easily be careless with matches when the grass was dry.

An indirect result of this “right to tucker” was that the
paid-off station-hand fell a willing prey to another class
whose prototypes had inhabited “The Rocks”, and who

SHEPHERDING AND MARKETING 115

waited for custom in the bush ‘^public houses”. For the
Nirvana of intoxication, and to escape for a few weeks from
consciousness of a life thrown away, the old hand would
surrender a cheque representing the reward of a year or
two’s work with no more compunction than ‘^a child
surrendering a sovereign for a coveted handful of sweets
What escape was there when they were paid by cheque?
Seamen at the end of a voyage are at least paid off in
coin, and may stand by one another. The pastoral hand,
coming in alone, was unable to pay for anything until
he had cashed his cheque at the “pub” or store. The
moment he showed it, he ticketed himself as worth so
much if he could be induced to “melt it down”.

Long accustomed to rations, the old hands had no knack
of cash payment, no sense of relative values. The warm
welcome at the “house of accommodation”, however
pleasant to their lonely souls, often covered the treachery
of “doped” liquor. At a certain shanty in Central

Queensland, known as “Billy ’s Private Cemetery”,

the publican was asked if there were any chance of getting
a couple of “ handy men ” to take out to a station. “ Looking
round to the ‘bar’ end of the ‘pub’ he pointed to one
fellow lying in a drunken sleep. ‘You might get that cove
in another three days. His cheque is nearly done. He
only brought £^o with him. Those other two are good
rough carpenters, but they won’t be ready for a fortnight
yet. They had over two hundred pounds between them
when they came in’.”^ The last scene in such a bout
would be the publican’s refusal to supply more liquor. The
cheque, by his reckoning, was duly “melted”. And then
the victim would depart, thanking “mine host” with tears
of maudlin gratitude for his final “gift” of a bottle of rum
to see him on the way.

^ Sec generally “Bushmen, Publicans and Politics”, in The Pastoral
Times y Dcniliquin, 1869 (Mitchell Library).

* Nisbct MS. (Mitchell Library), pp. 78 et seq, Cf. Hobler Papers y vol. v,
pp. 29, 34 et passim.

8-2

ii6 SHEPHERDING AND MARKETING

Licenses were granted by the Colonial Treasury at 5(^30
per annum, often over the heads of the local bench of
magistrates, who were nominally in charge thereof. The
calculation whether it would pay to buy one turned, as
of course, on the number of work-people in the vicinity.
Any station hand who left the neighbourhood without
“melting down’’ his cheque was spoken of by the publican
as having done him an unwarranted injury.^

To the squatters, the lapses of their men were at
the least a constant vexation and impediment; at the
worst a source of tragedy. An overseer on Ghinghinda
(Queensland), by name Salter, was murdered by a
shepherd recovering from a spree for no cause but a
few words of rebuke. At Christmas 1848 the manager of
Nap Nap (Lower Murrumbidgee) was “shot dead on the
shearing floor by one of the shepherds who, upon some
slight quarrel in which McKinlay had been only too for-
bearing, had gone to his hut, loaded a double-barrelled
gun, returned and discharged both balls through his
heart, at a few feet distance”. Nobody interfered with the
murderer’s escape. All too commonly, attacks by blacks
on isolated homesteads were provoked by ill-usage from
the station hands. Bosses and men were alike at fault in
this, but the criminal element among the “hands” made
them a source of added risk.

Station employment was thus in early days primarily a
backwater of the tragic stream of transportation. The
squatters preferred men “without encumbrances” for the
semi-nomadic life when wool-growing was half exploration
and all experiment. They cost less in rations. They did
not hanker after allotments which might prove the land
fit for agriculture and which always led to disputes about
“clearskins”. They bred no “wild colonials” to be “bush
telegraphs” or worse.

^ “They notice nowadays”, wrote G. E. W. Bean, On the Wool Track
(1910), pp. 205-16, “even in the Far West (of New South Wales) that the
new generation of Australians manages to keep its cheque in the country
towns, reach Sydney or Melbourne and lose it there.” More centralization!

SHEPHERDING AND MARKETING 117

From small settlers’ farms along the Hawkesbury or the
Hunter, and from the few married couples that found
employment on stations came the “currency lads”,
“natives” or “wild colonials” — “the results of the results
of the system”. Or were they a new type fashioned by
life in a wild, wide land? As early as Macquarie’s reign
they were spoken of as a new type, tall, loose-limbed, fair,
small-featured and, though strong, less athletic-looking than
Englishmen of the upper classes. None denied their versa-
tility with horses or on ship-board. In truth these children
of the First-Fleeters were reverting in a healthier environ-
ment to “the type of which their parents were debased
examples”. John McArthur’s shrewd eye sized up their
active, intelligent ways. “They v/ill be enterprising when-
ever a proper field is opened to their industry. At present
many of them have but little instruction and their future
prospects are very confined.”

For twenty years after his death (1834) their prospects
remained confined. Born in the worst period of New
South Wales or in Van Diemen’s Land, they laboured, a
contemporary noted, “under the disadvantage of having
seen a larger proportion of questionable morality than do
the children of our peasantry at home”. Yet many a
record stands of touching devotion to their education by
expiree parents. There was need of it. In the late ’sixties,
the Riverina, one of the first occupied squatting areas,
had 20,000 people scattered over 150,000 square miles
with “scarce a dozen schools and certainly not a dozen
clergymen”.

The lithe horsemanship of the young “natives”,
thoroughly at home in the bush, fitted them for more active
tasks than shepherding. They were the drovers, bullock-
drivers and horse-breakers. As shearers they were hard,
fast workers when they liked, but quarrelsome. Not
specially addicted to liquor, they were fond of horse-racing,
card-games and dancing. After roving awhile, they would
marry and settle in their native districts, but their

ii8 SHEPHERDING AND MARKETING

‘innate Bedouinism” came out in a sympathy for bush-
rangers and skill in “sweating” a horse. They resented
the police as enforcers of a code never their own. The more
worthy their parents, the less likely were they to remain
in districts where their children’s chances were so small.
But though settled on a coastal farm, the married “native”
would still turn up on the runs at shearing time, and
shearers^ were early noted as a class intent on a good
cheque which they knew how to carry past the publican.
Having homes, they knew the value of money.

The puzzles among station hands were the “new
chums”, “limejuicers” or “Johnny Newcomes” — awk-
ward immigrants from specialized England, serving a hard
apprenticeship to the rough parts of the work as con-
tractors’ mates or as sheep-washers. They liked jobs at
weekly wages, and though as a class they were neither
loafers nor dissipated, every lapse at a bush shanty made
self-respect harder to retain. Many sought the towns in dis-
gust; others “escaped to New Zealand and a kindlier folk”.

When transportation had ceased, but before Caroline
Chisholm had humanized country life by promoting the
immigration of families and by mothering the single girls,
pastoralists were growing restive at the “dangerous de-
moralization” of station labour. A magistrate in the
Bacchus Marsh area notes in his diary, 17 September 1849,
“Mr Labilliere called to ask for warrants for the appre-
hension of two of his servants who have absconded without
cause or notice. The rascals only hired just to get through
their time until shearing came on. I issued warrants, and
if I have the handling of the scamps they shall spend the
shearing season in the body of Her Majesty’s Gaol. ... It
will take a great many more immigrants to force upon
these scoundrels the practice of propriety or common
honesty.. .To pay such fellows high wages the whole
of the proprietary of the country has been sorely pinched
for years past”.^

^ Hobler Papers (Mitchell Library), vol. v, p. 125. Cf. L. Thomas,
Development of the Labour Movement, 1788-1848, ch. v.

SHEPHERDING AND MARKETING 119

Far more hands were employed on a run in shepherding
days than now. A shepherd was expected to look after
flocks gradually increased from 300 at Camden Park to
1500 or more on Queensland stations; his annual wage
was -£2^ or less in bad times. Rations in pre-gold days
cost a squatter at most another £12 10s. A hut-keeper’s
wage was from 3(^18 to £20’, sometimes, where flocks were
small on hilly country, one hut-keeper served for two
shepherds. Thus the prime cost of running sheep might
be as low as is. per annum.^ Then there were sheep-
washing and shearing costs. Men were paid a pound a
week and a full ration for washing 700 sheep a day.® The
work was thought to be done at reasonable cost when
over 5000 sheep and 300 lambs were washed in October
1849 at a total expenditure on wages and rations of
;^I4 loj.; that is about two-thirds of a penny per sheep.
The customary wage for shearing was 35. a score, but a
total shearing cost of ^d. a sheep wrung from its recorder
a wail that “we are working and scheming, employing
capital and time just to fill the pockets of insolent scoundrels
who thereby enrich blackguard publicans, often of their
own class. The state of the country is hopeless, unless
wages are much reduced”.

Any money wages, whether well or ill spent, seemed
high to pastoralists who had run their stations with
assigned servants paid by “truck” through the station
store.® In 1835, when such labour was still plentiful.
Captain Sturt estimated that a sum of £2^1^ invested
in wool-growing would amount after five years to ;^9845,
after paying 7I per cent, all through. The price of wool
was high at the time. New South Wales wool brought

^ This allows no profit on the extras issued from the store to the men.

^ For a description of the method of “creek- washing” see Macarthur
Records y pp. 442-7. On most stations extra labour was needed at lambing,
concerning which see Nisbet MS. (Mitchell Library), p. 18, and E. Shann,
Cattle Chosen, p. 179.

* As to the prevalence and effects of the “ truck system” see T. A. Coghlan,
op. cit. pp. 207-8, and pp. 430-1 . Cf. article on “ Industrial Law ”, by F. A. A.
Russell, Australian Encyclopaedia^ vol. i, p, 662.

120 SHEPHERDING AND MARKETING

from 2s, to 35'. 6d. per pound in London in the early
’twenties, and the island fleeces, which were better sorted,
somewhat more. The abolition of the preferential duty
caused a temporary decline after 1825, but best fleeces
were bringing between 2^. and 35*. a pound in 1829, and
inferior greasy fleeces as low as 6fi?. Prices rose in the ’thirties,
but fell heavily in the bad times after 1840, recovering
to an all-found average of ii\d. in 1844, 14^. in 1845 and
15^. in 1846, and weakening to 13^?. in 1848 and io\d.
in 1849. To meet the fall in values, wages were cut and
flocks increased in size, but what helped most was a rising
yield per sheep. Averages are not full evidence of this,
for they include the flocks of the unsuccessful with those
of the profit-makers. Though John McArthur cut 2 lb.
7 oz. per sheep in 1820, the average then was only i\ lb.
By 1828 it was i -|lb.,in 1835 it was if lb., and in 1839 2 Jib.
and almost 3I lb. in 'Van Diemen’s Land.^ In the ’twenties,
high freights and port charges made the export of any
but best fleece wool unprofitable, but by 1836 freight to
London or Liverpool might be had for i\d, or even a
penny a pound. ^ At such charges it paid to send the
skirtings as well as the fleece.

Nevertheless, the labour problem of the late ’forties per-
turbed squatters who had been used to the old system.
By 1848 there were no convicts in private employ on the
mainland, and, although immigrants filled the places de-
serted by expirees, they all asked for and obtained wages,
though few could long endure the isolation of the bush.
The squatters of Port Phillip, the most prosperous em-
ployers at this time, formed associations to bring over
time-expired convicts from Van Diemen’s Land; even
these stood out for ^20 a year. In 1845 ^be following
three years, several shiploads of ‘‘exiles” who had been

^ See T. A. Coghlan, Labour and Industry in Australia^ vol. i, pp. 254-5,
These are apparently creek-washed weights not comparable with the scoured
weights of to-day, being somewhat higher.

2 Cf. C. R. Fay, Great Britain from Adam Smith to the present day, pp. 152,
157, as to falling port dues after 1825.

SHEPHERDING AND MARKETING lai

taught trades in English prisons were sent out and set
free on condition that they did not return to England
during their sentences. They were employed, usually as
shepherds, until it was found that the squatters had no
means of preventing their drifting into the towns. There-
after, all classes united to stop the transportation of such
“Pentonvillains”. Chinese were tried, but those brought
were from Southern China and could not stand the
shepherd’s lot in the Victorian winter.

It was the gold discoveries, however, which caused such
a labour shortage that entirely new methods of running
sheep became imperative. When towns swelled into cities
calling urgently for wages-men at high rates of pay under
sociable conditions of work, the abundance of cheap
station labour was gone for ever. At the first news of gold,
before the occurrence and size of the deposits could be
gauged. Governor Fitzroy expected a glutting of the labour
market by the rush of voluntary immigrants, most of
whom he thought doomed to disappointment. The as-
sistance of migration by grants from the land revenue was
dropped. But as finds of fabulous riches succeeded one
another in Victoria, the difficulty of manning the stations
and shearing the sheep grew acute. The cessation of
assistance to immigrants was countermanded. New South
Wales, shorn of its rich Port Phillip District and bereft of
its most vigorous sons by the rush to its own and the
Victorian diggings, was hard put to it to maintain the
staple industry. Wages rose to unheard-of levels, especially
in districts near the Victorian border. In 1854 shepherds
were asking £/\.o a year with rations, and farm labourers
;;(^5o; while in Sydney carpenters were getting as much as a
pound a day, and masons and plasterers 30J., when employed
on the urgent tasks of building houses and business premises
for the swelling population.

These, and the even higher rates paid in Melbourne,
were not to last; only skilled tradesmen could command
the high day-wages. And the advance in station wages was

122 SHEPHERDING AND MARKETING

largely covered by the increased value of wool, which
rose to 13*3^. in 1853 and 17*7^/. in 1854, and by the
keen demand for butcher’s meat at high prices. Yet the
sheep-men felt the threat of a new restlessness; their men
had become unwilling to engage for long terms. Why, in-
deed, should a shepherd tie himself to the dullest servitude
with El Dorado a few score miles away, and nuggets as
big as e^gs or footballs awaiting a lucky blow by the
first-comer’s pick? The contrast between the monotony
of station employment and the roaring life of the diggers’
camps makes intelligible the renewal of restlessness among
the ‘‘hands” at every word of a new find. One need
hardly go beyond that contrast to see how gold accentuated
the harsh relations between squatters and labour, and
the Australian antipathy to regular pastoral employment.
A general exodus from the stations released from its baleful
associations all wh«r by hook or crook could gain a living
in the mining camps and port towns. The number of
“shepherds and persons engaged in the management of
sheep” fell, it is estimated,^ from 27,000 in 1851 to about
20,000 in 1856, in spite of considerable recruiting of as-
sisted immigrants.

For several years the pastoral industry barely held to its
pre-gold size. With the aid of immigrants, of aborigines,
and of the dulled and unenterprising remnant who would
not or could not break away from old ways, sheep were
somehow shorn; they could not be washed, so the wool
was sent home in the grease. Great numbers of stock were
sold as butcher’s meat to the new populations on the
“fields”; this occasioned a steady shifting of sheep and
cattle into Victoria. Yet the total of flocks there declined
during the period 1851 to i86i. There was no great
increase in the total number of sheep in Australia, though
seasons were not unfavourable. In 1851 there had been
i7>450>ooo in all the colonies. By 1861, when the stations
were again employing as many men as “before the gold”,

^ By T. A. Coghlan, in Labour and Industry in Australiay p. 680.

SHEPHERDING AND MARKETING 123

and flocks were again increasing fast, the total was less
than 21,000,000.

The limiting factor throughout the decade had been
labour. In 1856 one person was employed per 950 sheep:
the quota in 1851 had been one per 650. In South
Australia, from which the exodus had been almost general,
each shepherd was tending in 1856 an average of 2500
sheep. Such tending was so near to a formality that the
question pressed whether the shepherd might not be
eliminated altogether. John McArthur, in his experi-
mental way, had tried leaving sheep out in the open,
but the wet climate of the coast gave them foot-rot,
catarrh and other ills. The dingo, too, was very prevalent
there in his day, and given to worrying and killing sheep
for sheer love of hunting or mischief. In the drier interior,
now the main and almost the only scene of Australian
sheep runs, many an anxious squatter had noted that little
harm befell sheep left out at night by careless shepherds,
so long as the wild dogs were absent. In the late ’fifties,
Victorian squatters, especially those who had attained
the security of freehold, began under the pressure of
the labour shortage to fence their holdings. Increasing
population made the extermination of the dingoes prac-
ticable, and there were manifold gains to be made and only
one danger to be feared in fencing the runs into paddocks.
They had found out Australia’s greatest advantage in
the raising of sheep and wool. It is the one wide area
where sheep can safely be left to run wild for months
on end.

The gains by fencing were such that it quickly repaid
those who could face the heavy initial cost. Primarily it
did away with the crabbed old shepherds. Fewer men^
of a more dependable type, the mounted boundary-riders,
took their place. Often they found their own horses and

^ Earl of Belmore to Duke of Buckingham, 12 August 1868. “The re-
duction caused by fencing in the number of persons employed permanently
upon a run may be estimated at 80 per cent.’* In an Appendix to the Nisbet
MSS. Gregson estimates the reduction at 10 per cent. only.

124 SHEPHERDING AND MARKETING

saddlery. Married men, in Victoria and the central
division of New South Wales at least, would keep a cow
and cultivate a garden. The effects of the change upon the
sheep were even more important and proved to be cumu-
lative. Not being daily driven back and forth over the
dusty and bare area extending hundreds of yards around
each folding-place, they were less parched and worried.
Hence they produced better grown fleeces, and there was
no imperative need to wash them before shearing. Merinos
are by no means as gregarious as most breeds, and when
left to camp or roam, they did not destroy the herbage
nor waste their energies needlessly.

The one danger was that of increased losses by fire.
“When the flocks were shepherded the area grazed was
kept tolerably short and within considerable radius of the
stations there was but little grass to burn. In any case
the stock were unde* safe and handy control. In the wide
and spacious paddocks, however, the sheep were anywhere
and everywhere. In good seasons there was an abundant
coat of grass over all the run, not fed bare in any place
particularly, so that there was little protection against fire
for either run or sheep.”^ The danger was greatest in the
grassy plains of the Victorian River valleys, in the Riverina
District between the Murray and Murrumbidgee, on the
Western Slopes and the Queensland Downs. The mountain
pastures were moister and in the mulga country out west
the bushes and dwarf trees which provide the “top feed”
are usually too wide apart to let a fire travel. The menace
of fire in the best sheep country, however, taught every
good bushman to smother the embers of his camp-fire
before breaking camp, and made safety matches which
“strike only on the box” preferable to the older wax
vestas. That one danger among the many economies due
to fencing led the squatters to view without regrets the
thinner spreading of the country population when shep-
herding declined.

^ Nisbet MSS. (Mitchell Library), “Notes on Fencing” by J. Gregson,

SHEPHERDING AND MARKETING 125

Different kinds of fence were used according to the
materials to hand. Log fences helped to pack away much
dead timber in the ring-barked country. In open forest
many a hundred miles of post-and-rail fences were put
up by the ex-diggers who, when alluvial gold became
scarce, took fencing contracts rather than don the blue
overalls of miners on wages. All through the plains wire-
fencing was the rule. The ex-diggers won the admiration
of the squatters by their energy, the pride that would not
accept sundowners’ meals without payment, and their
relative success in refusing to be ‘Tambed down” at bush
shanties. They fenced paddocks which grew larger and
larger as the carrying capacity grew lighter out-back” — •
where paddocks of 20 or 40 ihousand acres are not
rare. Then they went on their way. While they fenced,
little out-back towns were busy handling fencing materials
and stores. Sleep deeper than ever came upon Dandaloo
and Never tire when the fencers went farther north.

Developed in Victoria during the late ’fifties, the new
method became at once the vogue where wages were
highest, spread through New South Wales in the ’sixties
and to Qiieensland in the ’seventies. The isolated and
poverty-bound Western Australians began log-fencing in
their timber-covered land during the late ’eighties, and
are still busy wire-netting against dogs in the mulga country
where miners’ curs have mated with and strengthened
the native dingoes.

The pastoral industry owes much, however, to that same
Australian dingo. It is proverbial among the boundary
riders that a good dog is equal to three men; and you
may see under the verandah of the “store” in any out-
back Australian town a type of dog, lean, smooth-haired,
prick-eared, ill at ease because of the folk about, watching
eagerly for its master. That is the kelpie, a breed which
dates back at most to the eighteen-sixties, but one so
fashioned to the conditions of “the wool track” that it
saves the squatter as much labour as his most expensive

126 SHEPHERDING AND MARKETING

fences, and provides the boundary-rider with his favourite
subject of conversation, when he has any. With small flocks
constantly “worked” the collie served, but out on the great
plains he has neither the stamina nor the habits required.
“No day is too hot, or cold, or long for the kelpie. En-
dowed with muscles of steel and a coat that defies all
weathers, he finds it all the same whether the heat be
110° in ^e shade or the biting winds and sleeting rains
are sweeping across the plains and chilling the larger stock
to the bone. Away on either wing, far enough out for the
wild merino sheep not to take fright and so split in all
directions, he gallops with his long tireless stride; or when
his wisdom tells him that they need it, stops and stands
like a statue facing them, then drops to the ground for a
space and creeps towards them like a dingo stalking game

till they turn and go the way he wishes The one thing

that can upset the^'^elpie’s working is the bindi-eye, a
wretched little three-cornered thorn which grows on the
plains and sticks in his feet; but when this happens the
owner shoes him with little boots of basil, and he goes on
working as usual.” ^ Of the four types of kelpie— black-
and-tan, blue, red, and “barb” or black— all owe much
to a Victorian black-and-tan sheep bitch named “Kelpie”,
whose appearance and quiet working plainly told of dingo
blood. Among true kelpies, only barbs bark when working
sheep, and they are fitted for cross-breds rather than for
the wilder Merinos. The original barb was so called after
the black horse called “The Barb ” that won the Melbourne
Cup the year he was born (1866) near Forbes, out of
Sally, one of Kelpie IFs pups. But the sheep men are not
as proud nowadays of their dogs* pedigrees as they might
be with advantage.

Prices of New South Wales wool ruled high in the ’sixties,
twice averaging over 19^?. a pound in the grease, and only

^ R. L. Kalcski, Australian Encyclopaedia^ vol. n, p. 452, whose charming
article the reader should consult for the steps by which the kelpie breed
was evolved, and also the Australian catde dog.

SHEPHERDING AND MARKETING 127

twice below i&d, prior to 1869 when they fell to 12*9^/. and
to 9*9^. during the Franco-Prussian War. After a sharp
recovery in 1872-3 they steadied at about I2d, a pound
during the decade from 1876 to 1885. Victorian greasy
wool brought a few pence more in most seasons. The lower
level after 1873 maybe attributed in part to a higher demand
for gold by Europe which was turning monometallic. Men
gave more goods for a unit of gold and thus all prices
stated in gold trended downwards, especially as gold
production decreased. A special cause of lower wool
values was the continued increase in the production of
wool on fenced stations and on the backs of better-bred
sheep.

An indirect benefit of ‘‘paddi^cking” was that run-
owners had more time and money to apply to the improve-
ment of their flocks. The average weight of the fleeces cut
in New South Wales rose to 5 lb. 7 oz. in the grease or
2 lb. 9 J oz. scoured in 1880, and to 5 lb. i if oz. in grease
or 3 lb. oz. scoured in 1890. As the number of sheep in
the colony also rose from 6,119,163 in i860 to over
35,000,000 in 1880 and nearly 56,000,000 in 1890, the
amount of wool coming on the market was large enough
to test its powers of absorption even though new countries
were sending their buyers to London and, as communica-
tions improved, to the showrooms of Melbourne and
Sydney too. So squatters turned on their ‘‘account sales’’
the same critical scepticism which had served them well
when they reshaped Spanish and German methods of
running sheep, and cut their own costs to the minimum
by fencing. They began to scrutinise the charges made for
brokerage, tare and draft, entry and warrants, com-
mission et cetera.

At first the “pure merinos” had followed John
McArthur’s example in sending their wool to be auctioned
by London selling brokers. At Garroway’s in Change
Alley, Cornhill — the very coffee-house from which Mr Pick-
wick sent Mrs Bardell that compromising letter about

128 SHEPHERDING AND MARKETING

chops and tomato sauce — Australian, Saxon and Spanish
wools were sold a lot at a time, “at per Ib., bids to advance
one penny”. The daily session lasted while an inch of
candle burned,^ After 1835, however, the increased scale
of the consignments from New South Wales and Van
Diemen’s Land led to regular auctions at the Royal
Exchange to which Germans came to buy rather than to
sell. The ^ondon selling brokers, by pamphlet, by word
of mouth to home-visiting squatters, and by letter, did
much to teach their clients nicety in the arts of washing,
pressing and sorting the clip.^ Washing, if overdone, gave
the wool a harsh and staring appearance — it was better
to have too much yolk than too little. Too tight a pressing
with the screw matted together all parts of the fleece so
that it required a man’s force to separate one from
another in the bale and produced a noise like the tearing
of coarse linen. “With the chance of having this market
to yourselves you Australians should be doubly careful

in getting up wool Some of the fine marks have

acquired a preference with buyers principally from the
various qualities and descriptions being kept by them-
selves.”®

The brokers were certainly capable schoolmasters on
the “get-up” of the clip, but were they as effective in
securing for the grower its full market value ? When the
novelty of Australian wool had worn off and the quantity
had increased, there were signs that it was not bringing
the best price by public auction. Bales bought in at
Garroway’s and sold privately made an advance on several
occasions, once of no less than 20 per cent. Squatters asked
indignantly whether the opinion prevailed among buyers
that Botany Bay wool-growers wanted money and must

^ See Macarthur Records, p. 440, for a facsimile of an 1821 Catalogue.

* Sec letters from James and John Macarthur junior in chapter xii of
the Macarthur Records'. J. W. McLaren to Frew Bros. Adelaide, 19 September
1843, Frew Papers (Mitchell Library), and T. Southey’s Observations addressed
to the Wool-growers of Australia and Tasmania, 1831.

® J. W. McLaren to Frew Bros. 19 September 1843.

SHEPHERDING AND MARKETING 1129

sell at once? Those in that unhappy position might be
bound to sell their wool through local merchants as a
condition of obtaining stores on credit.^ As early as 1823,
Sydney commercial houses were purchasing and consign-
ing wool to London. But the ‘‘pure merinos” knew too
much of the tradition of the New South Wales Corps to
sell through such intermediaries. For a generation they
bore with the London brokers, despite their qualms. In
the ’fifties the time involved in a journey to London grew
less. The clippers attracted by the gold rushes took only
half the hundred and forty days reckoned usual with the
old frigate-built Indiamen.^ Squatters, visiting “home”
more easily, began to look more closely into the customs
of the London brokers.

The more prominent of the brokers were joined in an
association styled “The New South Wales and Van
Diemen’s Land Commercial Association”. Its members,
so a band of inquiring pastoralists reported, had made it
their study, by deliberations and conferences, to acquire
an intimate knowledge of every matter of importance
affecting wool, and to continue to act in protection of the
permanent interests of the entire trade. The inquiring
squatters were evidently dubious of the brokers’ qualifica-
tions for their high calling. “It may not be out of place”,
they commented drily, “to observe that the association’s
unremitting and valuable services to the flockowner might

^ Hobler Papers, vol. vi, pp. 147-9, 27 April 1849. “Watson and Wight
to my great relief were disposed to give me the assistance I required upon
the pledge of my shipping my wool through their house and melting my
stock at their establishment; I to pay 2^ per cent, for their endorsement
to bills and 5 per cent, (per four months) for cash they might be called upon
to advance.” Cf. Nisbet MS. (Mitchell Library): “The biggest handicap
to the pioneer settlers was the rate of interest that they had to pay on the
money they had to borrow in order to carry on. ... I found a friend of mine,
who was a capital manager and judge of stock but no book-keeper, was
paying 17^ per cent, in addition to the obligation of getting all his stores
from the same firm at their own prices”.

® The ‘Thermopylae’, of George Thompson’s Aberdeen White Star
Line, ran from Start Point to Melbourne in 63 days 17 hours. In 1852
came the P. & O. steamer ‘Ghusan’,

130 SHEPHERDING AND MARKETING

acquire a readier recognition if its proceedings were better
known, and a larger body of importers enrolled among its
members”.^ Shortly afterwards the association changed its
name to “The Colonial Wool Merchants’ Association”,
but it remained an alliance of selling brokers. Manu-
facturers and growers were excluded. Its customs forbade
bids of less than a half-penny, and the disclosure of the
successful bidder’s name. Much wool, it was suspected,
was knocked down to the selling broker’s own employees,
and manufacturers might obtain wool only through
buying brokers or wool-staplers.

Warehousing methods, too, came in for criticism.
A Riverina pastoralLst who insisted on seeing his Booligal
clip weighed into the warehouse in London found an
increase on its colonial weight of no less than 5298 lb.
for the 938 bales, worth 2^. 4(/. a pound in London.
Hitherto this increase in weight had been masked by
wasteful sampling and unchecked weighing, so that
London firms, it was said, picked up their office expenses
off the warehouse floors. When the associated brokers
stiffly refused, however, to modify their customs at the
instance of the colonial pastoralists, many of these turned
to the local wool sales in Sydney and Melbourne.

Local sales had sprung firom small beginnings. York-
shire buyers had early scented the big profits that were
being made by buying small lots of wool direct from the
growers. P. B. Whitfield, an expert wool -buyer, was sent
out to Sydney to sell a station and remit the proceeds in
the form of wool; finding the operation lucrative, he
remained in the land. Another, James Johnson, landed
in Sydney in 1838 and at his death in 1906 was worth
£216,000.

Wool might reach the coastal ports at any time through-
out the year. A bullock team seldom averaged more than
twelve miles a day, and rains might make the black-soil

^ Report of Committee on Sales of Australian Wools in London, February
1870.

SHEPHERDING AND MARKETING 131

plains impassable for weeks at a time. There were no
telegraphs till the ’sixties nor railways beyond the coastal
areas until later. As soon as word came of bullock- waggons
toiling in with wool, the cash-buyers rode out to ‘‘Jack
Ireland’s Corner”, at the junction of the Parramatta and
Liverpool roads, or to “Bark Huts” on the way to Liver-
pool. Having satisfied the owner-driver that his accoster
was not a bushranger — though the distinction seems to
have been a conventional one — the buyer would clamber
on the waggon and slash the bales to inspect them, the
owner pretending utter indifference and refusing the first
offer as of course. An atmosphere more favourable to
business might be reached in the bar-parlour of the
“Farmer’s Home”, “The Woolpack”, “The Emu Inn”,
or the “ Square and Compass ”, while the working bullocks
were being watered at the Haymarket waterhole. What
margins the buyers could allow themselves in this unequal
contest may be gathered from Johnson’s avowal that in
one fortunate run of prices he obtained at least double in
London what he had paid in Sydney for each and all of
8000 bales, with the solitary exception of one lot for which
he paid 6d. and received only lod. in return.

After 1843, however, this wayside selling was super-
seded by local auction of small graziers’ clips. An
auctioneer named Thomas Sutcliffe Mort began to in-
clude bales of wool in his weekly general sales. His first
wool-store, erected by the T ank Stream in 1 844, was a primi-
tive affair without walls or gates — just an iron roof, a single-
bale weighing scales, and a dump. But small growers found
they secured better prices there than at the Belmore inn-
tables. Yet Sydney remained “a delightful antediluvian
hollow” during the decades when the colony’s best men
were going north to the Darling Downs and beyond, or
south to the Riverina and Port Phillip. Richard Golds-
brough, a wool-classer from Shipley in the West Riding,
bettered Mort’s example by erecting at Melbourne stores
on a scale undreamt of before in Australia. His were the

9-a

132 SHEPHERDING AND MARKETING

first properly lighted floors, and in the thirty years after
1848 he spent over 100,000 on show-rooms and ware-
houses. In this, as in much else, Sydney was for a time
eclipsed by her wealthy southern rival.

When in the ’seventies the big squatters began to
favour local sales, Mort was still holding his weekly
auctions in a low two-storied building by Circular Qjiay.
At the door a small boy would jangle a bell for half
an hour' before the sale began. The bidding went on
in relative silence, save for the auctioneer’s eloquent ex-
position on the virtues of each lot. By nods, winks and
raisings of their pencils, the buyers sought to bid without
disclosing any keenness. An old-timer from their ranks,
returning after many years of retirement to witness a
modern sale, shook his head at the babel of tongues.
“They make more noise, but we made more money!”
As wool came to m^^ket at all seasons, buyers lived on the
spot, and their ways were leisurely. Perhaps a buyer would
ask the auctioneer to stop a moment, while he went down
to have another look at the bales, set out on the ground-
floor. The request would always be granted; it put spirit
into the subsequent bidding. Or the auctioneer would
appeal to the owner as to the acceptability of the price
offered, a practice which once drew from a purple-faced
grazier the stammering outburst, “Don’t you dare sell
my. . .wool for sevenpence. Don’t you dare!”

Another oft-quoted contretemps was the occasion when
the wool-buyers’ chairman demanded in market overt the
withdrawal of a lot of wool which had been found to con-
tain rubbish in the middle of the bales, and called for the
name of its owner. The auctioneer’s finger pointing out a
prominent Legislative Councillor “did much to forward
the cause of honest packing”.^

Thus by an incessant elimination of waste and wasters

^ Many of these details arc from a series of articles on “The Romance
of Wool-Selling” by R. J. W. in the Sydney Daily Telegraph, Sept.-Nov.

1914-

SHEPHERDING AND MARKETING 133

the Australian pastoral industry kept up its competitive
efficiency. The full adjustment of the scene and method
of marketing to the world-wide demand for Australian
wool came later. As Britain’s manufacturing leader-
ship passed, wool-buyers of all nations sought the local
wool-sales.

CHAPTER IX

0-^-0

Free Colonies and Assisted Migration

o <<^ o

UNTIL the eighteen-twenties the Governors had
been the ‘‘prime-movers’’ in the economic as well
as the political affairs of New South Wales and Van
Diemen’s Land. The price which Britain paid for the clearing
of her gaols was largely left to their discretion. Macquarie,
for instance, pursued for a decade policies of which his
superiors increasingly disapproved. Yet even Macquarie
could only postpone, he could not set aside the veto of a
distant oligarchy upon extensions of vice-regal expenditure.
If it were burkedTor a time, the call from Whitehall for
greater economy became all the more emphatic when
unmuffled. Under Governor Brisbane there was such re-
trenchment in the public employment of convicts that
soon not a road in New South Wales remained in repair,
even by the rough standards then prevailing.

Britain no longer needed to pay for convicts’ keep while
constructing public works. The squatters had become
eager for their assigned service on the inland “runs”, and
until assignment ceased in 1839 the supply of convicts
seldom exceeded even momentarily the call for station
hands. Wool had made the squatters freer paymasters,
in the sense that their doings were subject to no ministerial
veto. In the mass they were also paymasters of more labour
than Governor Macquarie had ever employed.^

Though the assigned servants were bondsmen, the way
was plainly opening by which the prison settlements
would become colonies of free men. The changed status
of the leading free colonists was politically recognized by

‘ Sec generally on the convict population at this time Samuel Butler’s
Handbook for Australian Emigrants (1839), ch. 111.

FREE COLONIES AND ASSISTED MIGRATION 135

the institution in 1823 of a Legislative Council to which
seven and, after 1825, fifteen of them were summoned to
advise the Governor. The first step in the political educa-
tion of substantial householders followed in 1824, when
trial by jury was at last substituted for the semi-military
procedure of earlier days.

Restriction and free enterprize are always hard to mix.
The essentials of prison life as then understood were con-
finement and close supervision; these were maintained
with difficulty when New South Wales and Van Diemen’s
Land were no more than open, isolated prisons. But the
comings and goings of busy wool-ports were quite in-
compatible with such discipline. Brisbane sent Surveyor-
General John Oxley to spy out new sites for the main
prison. In 1823 Oxley picked upon Moreton Bay, named
the fine river there after the Governor and supervised
the founding of a new penal settlement under Captain
Logan, the perfect martinet.^ In England, however, other
counsels prevailed. After a period of limited continuance
in Van Diemen’s Land and Norfolk Island to 1853, and
then in Western Australia from 1851 to 1867, transportation
was abandoned as inconsistent with the healthy growth of
free communities. Between Bigge’s Reports of 1823 ^.nd
that of the Commons Committee in 1839 Australia passed
from the eighteenth century into the nineteenth.

Many currents mingled and eddied at the turn of the
tide. At Westminster the ruling aristocracy’s ambition to
hold imperial sway, though chastened by the loss of the
American colonies, was swelled afresh by the aggressive
philanthropy of the middle class. Industrial triumphs were
giving a new dimension to British trade and the middle
class felt itself called to spread civilization — some according
to the evangelical gospel, some according to the principles
of political economy — through all lands and climates. This
new social and political partnership at Westminster made

^ Concerning his labours and tragic death compare the accounts given
by T. A, Goghlan, op. cit. p. 1 56 and the Australian Encyclopaedia y vol. i, p. 762.

136 FREE COLONIES AND

practicable experiments in free colonization with land
grants at the Swan River and in systematic free coloniza-
tion around Adelaide. It also made possible the rapid
success of the anti-transportation movement, the clumsy
essays in state-aided migration, the maternal crusading of
Caroline Chisholm and, finally, whether as a gesture of
despair or as a daring venture of faith, the grant of colonial
self-government.

The new prosperity based on wool put a speedy stop to
free land grants. Both bases of that system — ^the grant of
areas proportioned to social standing and the payment of
quit-rents to the Crown after a few years of development —
had long been crumbling. The plan had fitted the phase of
experiment, when the climate was a riddle and the land had
no ascertained value, no proved utility in production. But
once free setders came out in force, eager to take up sheep
runs, the grant and'lVithdrawal of land at the will of the
Governor had become an anachronism. In a colony sure of
its future, investors of capital asked for security of possession
as the sine qua non. The change was registered by the waiving
in 1825 of the Governor’s “permission to settle”, previously
essential to free setders as well as expirees. With it went
the Governor’s power to “huff” a man’s land, which
Macquarie had freely used against grantees guilty of in-
sobriety and even at the expense of some who petitioned
the House of Commons against him.*^ Oxley suggested
the sale of any area in excess of 2000 acres which a setder
might require. Combinations of free grant and sale were
tried, but naturally led to very few sales. Land grants
were finally abolished in 1831.

The years of transition witnessed the coming not only
of scores of individual capitalists but of more than one
great joint-stock company. These ventures, recalling seven-
teenth and eighteenth century methods of colonization,
aimed at exploiting John McArthur’s discoveries on bold

^ See Macquarie MSS. (Mitchell Library), “List of Grants cancelled
through Seditious Conduct”.

ASSISTED MIGRATION 137

lines. They did notable work in exploring difficult
country, both in New South Wales and in N.W. Tasmania.
They opened up a coal trade; they introduced Saxon and
Spanish sheep of the highest quality. According to a
French contemporary, Pilorgeiie, the “gigantic enterprise
of the Australian Agricultural Company”, which ex-
pended £^00,000 in the northern area of New South
Wales, “awakened public attention and directed it to-
wards Australia”. But privileged companies, exonerated
from quit-rents on their huge estates because they relieved
the public of the expense of maintaining thousands of
convicts, sorted ill with the doctrines of natural liberty and
equal opportunity — at least for those with property —
which Adam Smith had popularized. Nor did their
resemblance to the East India Company help them with
British middle-class or Australian opinion. ^

Philanthropists were critical of the assignment of con-
victs and of transportation generally. Wilberforce’s long
crusade against negro slavery was soon to be followed by
a sharp and decisive attack on the export of criminals.
Thus it fell out that the last company projects, those of
the Swan River Colony and South Australia, ended in an
odd mixture of private adventure and public responsi-
bility. As fields for investment they suffered by this con-
fusion of ideals, yet the delayed success of the latter
province showed the way to free colonization and sowed
the seed of self-government, though not in the drilled and
systematic lines its projectors first planned.

In April 1827 Governor Darling appealed for a per-
manent settlement on the Swan River. Glowing accounts
of the fertile soil there had come from Captain Stirling^

^ For accounts of the two principal companies, the Australian Agricultural
Company and the Van Diemen’s Land Company, see Stephen Roberts,
History of Australian Land Settlementy ch. vi and Appendices i and ii.
Professor Roberts* acceptance of Jorgensen’s claims to have forestalled
Hellyer, the V.D.L. Co.’s surveyor, in discovering the Surrey Hills in N.W.
Tasmania, is adversely criticized by Mr A. L. Meston in his paper before
the A.A.A.S. 1928, on “The Work of the V.D.L. Co. in Land Settlement”.

138 FREE COLONIES AND

R.N., who visited it after revictualling a military post
under Major Lockyer sent in 1826 to guard King George’s
Sound against French occupation. The Colonial Office, at
first favourable, drew back in fear of the expense of
founding a free colony. In November 1828 a syndicate,
including Thomas Peel, Sir Francis Vincent, Colonel
Potter McQueen and E. W. H. Schenley, offered to settle
10,000 persons there and to provision them for four years
if granted land at is. 6d. an acre in return for their
expenditure. This they estimated at ^^300, 000 and they
asked for four million acres. They had in mind a pro-
prietary colony like Pennsylvania. To set the ball of
production rolling they planned to give each male settler
200 acres out of their grant. The balance they would sell
as production gathered momentum and the demand for
more land grew.

The Colonial 0ffice virtually destroyed their project,
first by limiting the grant to a maximum of one million
acres, and then by issuing regulations (December 1828)
which threw open to everyone the whole area of the
colony. Not only the projectors, but any who brought
out property for the occupation and development of the
land, were to receive 40 acres for every thus invested.
Grants proportioned to property had long been the rule
at Sydney, but the application of such a rule where there
was as yet no centre was fatal to the syndicate’s plan. It
had thought to create such a centre and to draw profit
from a monopoly of the land around it. How else could
it recoup initial expense? All but Peel saw that this scheme
would fkil, and withdrew.

The colonists who went out in 1829 included, according
to Governor Stirling, “more than the usual number of men
of property and family”. Both rich and poor expected,
from Stirling’s account of the soil and vegetation, to find
rich loams and succulent native grasses. They looked about
for open plains and park-like downs on which to repeat
the rapid progress as pastoralists which had so lately fallen

ASSISTED MIGRATION

139

to the lot of many in New South Wales. If some ‘‘expected
the moment their feet touched the shore to find inns,
turnpike roads, smiling orchards and cornfields in a
country untrod by civilized man”, this only showed how
few can picture the complex, unending drudgery involved
in beginning at the beginning — in clearing the virgin forest
and building up by faith and toil and sheer fatigue the
setting of a good life for others. The officials of Whitehall
had not made much progress between 1786 and 1828 in
imagining the task.

The first-comers took up the best land they could find
along the coastal rivers — the Swan and the Canning, the
Serpentine, the Murray and the Harvey. Little of it was
good land, and they went far afield in search of better.
Their homesteads were scattered over a coastal plain with
few areas of loam, where through the long hot summer
land-transport over deep sand tracks is exceptionally
arduous. Two defects beat down their high hopes : lack
of grassy plains on which to depasture flocks and herds, and
lack of labourers. Grasses are markedly absent from the
forest floor of the great belt of “mahogany ” or jarrah along
the escarpment behind the sandy coastal plain. Even
where they found grass under the open tuart trees on the
limestone hills nearer the Western Coast, the amazing
contrast between the dry desolation of summer and the
verdure of the wet, mild winter caught them unprepared.
The lack of labour was paralysing to middle-class folk
accustomed to over-populated England.

Edward Gibbon Wakefield — fixing his attention on the
failure of Thomas Peel, who landed 300 settlers, spent
;^50,ooo and quickly reduced himself to beggary and isola-
tion— attributed all these evils to the 1828 regulations, as
he, from Newgate Prison, imagined their working. But the
picture he painted to a Commons Committee on Waste
Lands, though admirable as propaganda for his own system
of colonization, slurred over other reasons for Peel’s mis-
fortunes. Peel, though a cousin of the great Sir Robert,

140 FREE COLONIES AND

was no leader. The land was unsuited to sheep and hardly
less so to cattle. Poison plants killed scores of stock.
Both stock and settlers were speared by blacks. The more
experienced farmers, such as the Hentys, after a hurried
search for better land, re-emigrated to Van Diemen’s
Land. The die-hards, facing terrible natural obstacles to
pioneering, put up a grim and for long a doubtful struggle.
Pastoral production grew very slowly out of explorations
that revealed an almost waterless interior.

Wakefield told how the 1828 regulations gave priority
to the grantees of immense estates, separated the settlers
by “great deserts”, condemned some to die of hunger
because they did not know where to find the governor’s
house and food, and the governor to impotence because
he did not know where to find his poor subjects. Too long
his fancies passed current as an historical account of this
“scarecrow of colonJiation’’.^ Wakefield was bred to the
trade of a land-agent. In writing about the Swan River
Colony he was concerned far less with truth than with a
background against which he might depict the harmonies
of “systematic colonization”, his own panacea.

Success in starting a free colony, he held, depended on
selling land at a “sufficient price”. Out of the land-sales-
fund the immigration of labourers should be subsidized.
These, unlike Peel’s men, would be impelled to remain
in service by their inability to pay for land a price de-
liberately raised high enough to baulk their land-hunger.
Till they had served an apprenticeship in colonial con-
ditions and saved the “sufficient price” of a little farm,
these free labourers were to be the “combinable labour”
for lack of which the respectable Swan settlers had endured
such woes. A colony adopting Wakefield’s plan would
escape all tribulation. The “sufficient price” would adapt
the supply of labour to the supply of land. Land sales —
assisted immigration — more sales — more labour, and the

' See R. G. Mills’s admirable book. The Colonization of Australia, 1829-42,
pp. 64-72.

ASSISTED MIGRATION 141

thing was done. In truth, it was to be a land-agent’s
Utopia.

The experiment of a Wakefield colony at Australind,
on Koombana Bay, a hundred miles south of the Swan
River, should have been decisive in showing the virtues
of the “sufficient price ”. Land there was sold at a pound
an acre, surely a “sufficient price”. Otherwise the con-
ditions were remarkably similar to those on the Swan.
There were labourers in plenty at Australind in 1842,
effectually prevented by the “sufficient price” from
buying the land — combinable labour or landless prole-
tariat after the best English model.^ Yet the cycle of land
sales and subsidized migration would not revolve. Once
the character of the soil and the problem of marketing its
produce had been tested, the Australind Company could
not dispose of its blocks at ss. an acre. The land market
was glutted in Western Australia; earlier buyers were
willing to cut their losses and sell at a farthing an acre.

Such stumbling was perhaps inevitable in a territory
of “mottled” soils, like Western Australia. After all the
puffing and booming, land values must be based on the
net production, a singularly individual fact which varies
widely from block to block. The control or fixing of a
uniform and sufficient price for all the land in a colony,
by a group of gentlemen around a table on the other side
of the globe, necessarily imported into its sale the at-
mosphere of a lottery. And when all the previous numbers
had proved to be blanks, the interest of the public in the
lottery naturally grew cold. But Australind was an after-
thought, a trial of the Wakefield plan in a scene damned
in advance by his own propaganda of earlier years.

Wakefield’s system for the planting of free colonies
dated back to a dismal picture he had sketched in New-
gate during 1829 of *0 plight of well-to-do settlers in
New South Wales. On his release in 1830, he set himself

^ For the story of the Australind Settlement, see Miss E. L. Burgess’s
paper in the Jiepor/ of the igsS Meeting {Perth) of the A.A,A.S. pp. 478-96.

142 FREE COLONIES AND

to use the growing interest in Australia and the long-
standing concern over British unemployment as the bases
of an experiment in systematic colonization in an unspoilt
field. Free grants of land were not only wasteful now that
wool was booming; they were also offensive to the
political opponents of privilege. In January 1831 the
new Whig Government went half-way towards adopting
Wakefield’s plan when they abolished grants and sub-
stituted sale as the sole means of disposing of colonial
land. But by that time 3,344,030 acres had been granted
in New South Wales, and 1,200,000 acres at the Swan
River. Ricardian principles were in the air and it was
presumed that the first-comers had picked the best land
there. Wakefield, therefore, behind the screen of propa-
gandists, sought a virgin field where his system of selection,
concentration and sale of land for the support of emigra-
tion might work untbwarted. The area around St Vincent’s
Gulf and Encounter Bay — praised by both Flinders and
Baudin, remote alike from the iniquities of Sydney and
Hobart Town and from the miseries of Swan River — had
already attracted him when at the end of 1830 word came
that Captain Sturt had traced the great inland rivers to
an outlet in that very region. To the enthusiasm Sturt
aroused, there ensued, as in the Swan River project, a
conflict between plans for a proprietary colony and pre-
cautions for public control. Again the Colonial Office
stumbled into an incoherent compromise.

In June 1831 Anthony Bacon, a Peninsular and Waterloo
veteran, proposed a colony in South Australia that would
cost Government nothing. He was to be its Governor.
Under-Secretary Hay, with the Swan River on his mind,
replied that such schemes were ‘‘always liable to end in
becoming in some way or other a source of expense to
the revenue of this country”. Then the Wakefield group
put forward proposals for a proprietary company which
should quickly transform itself into a self-supporting free
colony. The Company was to raise half a million of capital.

ASSISTED MIGRATION 143

to spend a quarter of this on buying land in the colony,
and another 25,000 on advances to settlers. The other
half of its capital it was to employ directly on its own land.
A Governor recommended by the Company, but appointed
by the Crown, was to have despotic authority until the
population reached 5000. When they numbered 5000 and
could meet the expenses of their government, they should
be allowed annually elected Assemblies, liberty of the
press, freedom of trade, no interference with religion, and
a militia of all adult males for purposes of defence.

Such ideas seemed to the Colonial Office “wild and im-
practicable”. Prompted by its Counsel, Mr James Stephen,
it objected to “transfer to this Company and ultimately
to a popular assembly the sovereignty of a vast unex-
plored territory, and erect within the British Monarchy a
government purely republican”. Wakefield, blaming the
Whig chiefs for the opposition, commented drily: “If the
Company should revive their project they would do well
to put a House of Lords into it, with a Baron Blackswan,
a Viscount Kangaroo, a Marquis of Morrumbidgee, and
a Bishop of Ornithorhyncus”.

At the end of 1833 Captain Sturt came in person to
the aid of the projectors, impressing the value of South
Australia and urging that the Murray River navigation
must be “the grand attraction of the Scheme ”. Suspicions
of the promoters’ money-making designs were smothered by
the adoption of a form of government by officials. There-
after events moved quickly. In 1834 a South Australian
Association successfully lobbied through Parliament an Act
(4 & 5 W. IV, c. 95) to establish the British Province of
South Australia. The crux of the compromise was to be
a Board of Commissioners appointed by the Crown to
manage land sales and migration on Wakefield’s lines. ^
Initial expenses of foundation were to be met out of a
loan of ;{;*200,ooo to be raised on the future revenues of
the Province, with the land fund as collateral security.

^ For a summary of the provisions of the Act see R. G. Mills, op. cit. p. 233.

144

FREE COLONIES AND

Colonization was to begin after :^35,ooo worth of land
had been sold and ;;(^20,ooo lodged with the British Govern-
ment as a guarantee fund. The scheme was weak in that
it divided responsibility. Though the Commissioners raised
the money for government as well as for migration, the
governing officials were not directly responsible to them.
It is true that the Commissioners could enforce their views
by their coptrol of the purse, but only with a maximum of
friction and mutual antagonism.

The ablest of the Commissioners, George Fife Angas,
resigned in 1835 to form a South Australian Company.
This was a purely private venture, not to be confused with
the 1831 project of a proprietary company to found and
rule the colony. Angas’s Company, with a capital of
made extensive purchases of land which gave the
movement a decisive fillip. He was a man of capacity and
imagination, witnessed by his share in founding more than
one Australian Bank.^ At the very start his care included
the education of settlers^ children, and in 1838 he suc-
ceeded in attracting to the new colony over 600 Lutheran
zealots. By the end of 1850, 6000 more had followed
them. Their descendants have played a very honourable
part, especially in the active agriculture of the Province.
Few of the colonial leaders, however, equalled Angas in
foresight. The officials and resident Commissioner, by
wrangling over every step preliminary to the settlers*
private exertions, almost brought the settlement to a
standstill.

Some officials were energetic and competent, notably
Colonel William Light, the Surveyor-General. Others were
not, and were distracted from their duties by the leave to
trade, which in a spirit of false economy had been granted
to eke out small salaries. Arriving in August 1836, only
a few weeks in advance of the first fleet of colonists. Light
had to choose the site of the first town, to survey it and also

^ The Union Bank of Australia and the Bank of South Australia, as well
as the National Provincial of England,

ASSISTED MIGRATION

145

the country blocks so that the first subscribers might exercise
their right of ‘‘first choice of land throughout the Colony’’.
Foremost in importance was the decision to be made be-
tween (i) the coast of Gulf St Vincent, praised by Flinders,
(ii) Port Lincoln, considered by one of Baudin’s officers a
harbour worthy to rival Port Jackson, and (iii) the Murray
Mouth, prima facie the key to a great riverine hinterland.
To Governor Hindmarsh’s surprise he found when he
arrived (28 December 1836) that Light had chosen the
present site of Adelaide, attracted by a fair harbour and
an abundance of fertile open land. Contention raged, but
Light’s choice was upheld against the Governor and the
Company’s local representative by a big majority of the
settlers, now numbering 600 (Feb. 1837). But his progress
in surveying was beset by demands from investors that he
should mark out the lots in the first town, Adelaide, before
measuring land for farms, and hindered by the preference
of the unacclimatized farmers for pockets of good land
in the cool Mount Lofty ranges, rather than on the
Adelaide plains.

Rapid arrivals of colonists caused the demands for land
to accumulate. Light’s request for more surveyors, voiced
by his deputy G. S. Kingston, drew from the Com-
missioners nothing but criticisms and absurd instructions
to expedite the work.^ Light resigned, and few of his staff
would take service under Kingston. The survey broke
down. The would-be-farmers missed the favourable seasons
of 1838-9 and 1839-40, when they might well have been
able to export wheat to drought-stricken New South
Wales. Much capital, badly needed for development, was
spent on the import of foodstuffs at high prices. Denied
practical use of an evidently fertile territory, the colonists
turned to wild speculation in town lots. Governor and
Commissioner, still quarrelling, were recalled, and in

^ For some detail of the part played by the incompetent Kingston see
A. Grenfell Price, Foundation and Settlement of South Australia^ pp. 75-8, 85-8.
This work supersedes all earlier accounts.

146 FREE COLONIES AND

October 1838 Colonel George Gawler took charge as both
Governor and Resident Commissioner. The population of
3680 had been concentrated all too successfully; they were
almost all in Adelaide.

Gawler saved the situation. In place of Kingston, who
“left the service to perform duties of equally dubious value
as City Engineer ’V Captain Sturt, who had sold his
station at Mittagong in New South Wales and brought
cattle overland from the Murray, was set to survey the
country lands. A staff was gathered from Light’s men,
from the eastern colonies, and a belated detachment of
sappers. Then the work was retarded and disorganized by
some thirty “special surveys”, giving big purchasers their
pick of 450,000 acres from the unappropriated land. But
even this meant progress in the pastoral use of the Province,
Overlanders, beginning with Joseph Hawdon (3 April
1838), were rapidly >stocking the excellent open pasture
lands. By December 1840 there were 4400 people in the
country districts, 8000 acres under cultivation, 67,000
cattle and a quarter of a million sheep. More came over-
land than sheep and cattle. Runaway convicts were of
good service as sawyers at a time when building and
fencing materials were very scarce, but their turbulent
doings in the Mount Lofty Ranges made an inop-
portune call on the colony’s slender funds for extra
police. 2

Perhaps because he knew that Stephen of the Colonial
Office expected the collapse of the Commissioners, Gawler
went on with free energy to repair the colony’s lack of
police, roads, harbour and public buildings — “the neces-
sary permanent outfit”. In 2| years he drew on the
Commissioners for £2"]0^ooo not covered by the colony’s
revenue. Torrens, their leader, had been inspired by
Wakefield to object to the use of the land fund for govern-

^ A. G. Price, op. cit. p. 133. Gf. p. 178, for his supervision of the construc-
tion of a Government Wharf at Port Adelaide.

^ See A. G, Price, op. cit. p. 130.

ASSISTED MIGRATION

147

mental expenses. It was reserved, somewhat pedantically,
for the sending of immigrants. The coming of these in
spate constantly forced Gawler into more urgent building.
Yet the Commissioners failed to borrow the balance
20,000) of the loan that had been authorized for
first expenses of government such as this. The antinomy
between private adventure and public authority inherent
in the Foundation Act of 1834 was still unresolved. In
December 1839 Lord John Russell replaced the South
Australian Commissioners, who had asked him for salaries,
by a Colonial Land and Emigration Board which was to
manage migration to all British colonies. The change
might promise an extension of systematic colonization to
all, but what was to be done to reli-'^ve the congestion in
Adelaide and to meet Governor Gawler’s bills?

While this problem was being fumbled at home, there
came adverse reports of the South Australian hinterland.
It was but a fertile island ringed by salt lakes. The colony’s
credit slumped. When the new Board tried to raise the
balance of the authorized loan not a single subscriber
offered. They refused (Sept. 1840) to accept any more of
Gawler’s bills, ordered him to dismiss the police, and
asked the Colonial Office to take up the financial burden.
It refused. The colony was bankrupt and remained so until
after months of deliberation a Commons Committee re-
commended government assistance. Gawler was recalled
and superseded in May 1841 by Captain George Grey.
With much gusto Grey exposed the laxity of Gawler’s
control of expenditure. He put an end to its demoralizing
effects on the labourers who preferred Adelaide to the
bush and on the contractors who gaily swindled the distant
taxpayers of Britain. Yet Grey insisted on the payment
of the bills that had given the colony an effective start,
and if his policy of keeping public expense within the
colonial revenue was due and salutary, it must be re-
cognised that Gawler had retrieved the land situation,
pushed on the surveys and settlement, and left the Province

10-2

148 FREE COLONIES AND

“with all its problems solved save those of unemployment
and finance”.^

In the last resort the Province was saved by the quality
of its land and climate, which now enabled the settlers
to produce their earliest abundant harvests. Wakefield’s
system was well adapted to finding funds and launching
a colony by well-planned puffing. Such puffing, however,
provoked speculation. Raising the sufficient price of land
after a specified time only aggravated that phase. Whether
the colonists could make good their investment or even
survive it depended, of course, upon the quality of the soil
chosen. “The calibre of the early settlers”, wrote George
Grey long after, “gave me trust in the new Anglo-
Saxondom of the Southern Hemisphere. There was a
worth, a sincerity, a true ring about them which could not
fail of great things.” Anglo-Saxons in either hemisphere,
and possibly other]^, too, are given to emphasizing the
human merit behind success. But the same human factor
was present at the Swan River and its outposts where suc-
cess was slower to come.^ South Australia had the other
essential, an endowment of agricultural land needing
small initial expense for clearing. Adelaide is within what
remains to this day the most uniform and continuous
stretch of first-class wheat land in Australia. At the end
of 1842 a harvest worth ;^98,ooo was gathered, more than
half of which was exported. Such progress made the
colonists sure of triumph over temporary straits.

Wheat exports oversea were not very profitable, how-
ever, and New South Wales had now escaped from drought.
Duties continued to be levied in Britain on Australian wheat,
while that of Canada was being admitted free. The price in
Adelaide during 1844 fell as low as half-a-crown a bushel.

* A. G. Price, op. cit. p. 209. See, too, his rehabilitation of Gawler’s land
policy, pp. 145-6, and works expenditure, pp. t88, 194. Grey’s success was
built upon what Professor Scott (Short History of Australia, p. 151) too strongly
terms “Gawler’s failure”.

^ For an instance consider the persistence of the Bussells, Turners and
others in the face of defeat by the big timber at the Leeuwin, Cattle Chosen,
passim.

ASSISTED MIGRATION

149

Yet wages were maintained and increased by the proving
in that year of big deposits of copper ore a little north
of the capital town. Copper-mining at once set up a new
era of speculation and prosperity. No system of migration
nor minimum price for land could keep agricultural
labourers from turning miners at high wages on the Burra
and Kapunda lodes. But an ingenious young Northum-
brian saved the farmers. He greatly reduced the cost of
producing grain by inventing, out of a hint from Livy
and ancient Gaul, a horse-driven machine that stripped
the ears only. Ridley’s '‘stripper” made feasible a profit-
able export trade in wheat and was a masterstroke in
reconciling high wages with low costs. In this it antedated
fencing in the pastoral industry by iieveral years. ^

In South Australia, as subsequently in every colony,
mining played a most useful part in attracting colonists.
Looking back into the past, a South Australian attempted
in 1892 to state a norm of Australian settlement, departure
from which had always brought difficulty. "The proper
order of events is first pastoral occupation of large areas —
practically detailed exploration of new territory: then
mining in the all too few localities where minerals exist:
then the gradual subdivision and development of the land
for higher utilization ”.2 Every historical formula carries
an insidious suggestion that its phases occur inevitably
and automatically. This is not so. Western Australia, for
instance, with its minerals in arid country, had to wait
long for the miners and for adequate people and wealth
to develop her refractory though rich resources. To South
Australia the miners early brought their unsystematic but
strengthening impetus. As soon as the copper and silver

^ A. S. Ridley, A Backward Glance (1904), collects the evidence as to the
origin of Ridley’s stripper and its claim to priority over other South
Australian attempts at a solution. According to David Gordon, The Central
StatCy Ridley’s stripper reduced the cost of harvesting from 2s, per bushel
to or from £2 an acre to 55. lod. for a 20 bushel crop.

* Quoted by Stephen Roberts, Land Settlement, p. 289, from Holder, a
South Australian squatter.

150 FREE COLONIES AND ASSISTED MIGRATION

ores found in 1843 had been proved, capital and labour
flowed again into the Province. Where minerals were
known to exist, Governor Grey delayed for the maximum
of three months the sale of the “waste lands” containing
them in order to ensure active bidding. “A few weeks ago”,
reported an astonished merchant in May 1845, “a hundred
acres of land adjoining a copper mine at work, distant
fifty miles from this, was sold at the Government sale for
5^2201 . . .Adelaide is now obtaining a good name amongst
our hitherto jealous neighbours.” But private knowledge
often ran ahead of government precautions, and two areas
of 20,000 acres of metalliferous land were bought at the
minimum price of £ x an acre.

Governor Robe, Grey’s successor, was baulked in an
attempt to secure by royalties a public share in the profits
of mining. A legal decision ruled that his insertion of a
clause in land-titlel^ reserving to the Crown a fifteenth
of the value of metals won, was inconsistent with the
statute governing such titles. And the Legislative Council
would not amend the Act. A Land League was formed
among leading buyers which kept down competitive bid-
ding and divided by lot what was bought.

The Province steadily gained in population and pros-
perity. By August 1848 it had 38,666 inhabitants, and an
ordinary revenue of ,(^82,41 1. Land sales since its founda-
tion had totalled 3(^530,877. Western Australia at the same
date had about 4600 colonists. The stagnation of trade and
production there led this handful of people to petition the
Home authorities for convicts, whose employment on roads
and public buildings might galvanize trade and improve
the means of transport. The grant of their petition and the
arrival of the first prisoners at Fremantle in June 1850,
though worth a hundred thousand pounds a year of Imperial
expenditure, accentuated the contrast between Eastern and
Western Australia. For by that date the movement against
transportation had in the eastern colonies reached the eve
of complete success.

CHAPTER X

From Transportation to Family Life

During the eighteen-thirties, Archbishop Whately
of Dublin led an effective attack on ‘‘the system
of transportation’’.^ The sending of convicted men
and women oversea, he reasoned, neither deterred others
from crime nor reformed the criminals, and it hideously
contaminated the new communities in Australia. The
British public and Parliament, roused by his logic, were left
unsatisfied by the apologies of Governor Arthur (V.D.L.)
and of Archdeacon Broughton (N.S.W.). A Select Com-
mittee of the Commons reported in 1839 ‘‘that trans-
portation to New South Wales and to the settled districts
of Van Diemen’s Land should be discontinued as soon as
practicable”. They found “inefficacy in deterring from
crime and remarkable efficiency in still further corrupting
those who undergo the punishment” to be inherent in
the system, and inveighed against the “monstrous evil of
calling into existence and continually extending societies
or the germs of nations most thoroughly depraved”.

In Sydney the prospect of abolition at first provoked
opposition rather than support. The Legislative Council,
representing the squatters and large employers, urged
“that the sudden discontinuance of transportation and
assignment must necessarily curtail the means of purchasing
Crown Lands and consequently the supply of funds for
the purposes of immigration”. The Secretary of State paid
small regard to this special pleading, though he approved
Governor Gipps’ suggestion to restrict assignment to the

^ The subject-matter of this part of the chapter is more adequately treated
in Ernest Scott’s Short History of Australia, ch. xvii.

152 FROM TRANSPORTATION TO

country districts, “as a step towards the entire discon-
tinuance of assignment throughout the colony, at as early
a period as practicable More complex must have been
the motives of a Sydney public meeting (9 February 1839)
which promoted a petition for continuance signed by
4000 people. Sir Timothy Coghlan attributes the peti-
tion to an idiosyncrasy of the emancipists which led them
to identify^ their self-respect with the retention of con-
victism. Vulgarity in a king is said to flatter the majority
of his subjects, and a steady supply of criminals may have
assured to the emancipists in Sydney a social status often
based on ill-gotten wealth. Colonial opinion, however,
whether bond or free, played at first a minor part. The
initiative came from British humanitarians.

The Order in Council which on 22 May 1840 abolished
transportation to New South Wales left Norfolk Island and
Van Diemen’s Land fi«s “penitentiaries” to which for the
future only long-sentence criminals were to be sent. At
Norfolk Island, Alexander Maconochie^ made trial of re-
formatory methods as opposed to those of exemplary
punishment. At Port Arthur and Macquarie Harbour in
Van Diemen’s Land severity passed the limits of human
endurance, often driving warders and victims alike into
stark insanity.

Before Peel’s reform of the criminal code had had time
to bear fruit, 4000 felons were still transported annually
from British prisons. “Mr Mother Country” still held it
“indispensable that within the Australian colonies re-
ceptacles should be found for all the convicts and exiles
who may be sent from this country in execution of judicial
sentences.” This he considered “so momentous an object
of national policy that we can acknowledge no conflicting
motive as of sufficient importance to supersede it”. The
fate which the momentous object of national policy im-
plied for the “receptacles” had by 1846 become all too

^ See Australian Encyclopaedia^ articles on “Convicts**, vol. i, pp. 301-2,
and on “Maconochie**, vol. ii, p. 14.

FAMILY LIFE

153

plain in Van Diemen’s Land. Apart from emancipists
and expirees freed by servitude, there were in the island
293949 prisoners out of a total population of 66,105. The
plan by which, according to their conduct, prisoners were
drafted through probation gangs into private employ-
ment had broken down. Squatters and farmers, in spite
of the working of a sort of Gresham’s law that bond
labour drives out free, could not find places for the ‘^good-
conduct men”. Of 10,480 in the probation gangs, 3852
were due for good-conduct passes into private service
during the year, but 3509 of the 12,240 already holding
such passes were still waiting for masters.

On the mainland the threatened cessation of bond labour
led landowners to give ear to the suggestions of the Colonial
Office that some of the surplus convicts should be smuggled
into New South Wales under a modified “system”. W. E.
Gladstone, observing the glut of labourers in the island
and knowing that the squatters north of Bass Straits were
in need of labour, made certain qualified and involved
proposals to Governor Gipps.^ “It will be acceptable to
Her Majesty’s Government if the members of the Legisla-
tive Council of the colony will show a disposition to concur
in the opinion that a modified and carefully regulated
introduction of convict labourers into New South Wales,
or into some part of it, may under the present circum-
stances be advisable. It seems probable that we may again
be approaching a period — if indeed such period has not
already arrived — when the supply of free labour in the
Australian colonies is on the whole below the demand.”
A Committee of the Legislative Council, under the chair-
manship of William Charles Wentworth, duly reported in
favour of the revival of transportation under Gladstonian
safeguards (Oct. 1846). There were to be no government
gangs and no assignment in the towns. This would placate

^ The text of the despatch may be read in the H.R. of A. series i, vol. xxv,
PP* 34“7» or in Goghlan, op, cit. pp. 336-40. According to Ernest Scott,
Short History of Australia, p. 193, Mr Gladstone was a partner in a Port
Phillip sheep station.

FROM TRANSPORTATION TO

154

immigrant labourers and artisans. Both convicts and ticket-
of-leave men were to be confined to the country districts.
For each male convict a female, free or convict, was to
be sent, and as many free migrants as prisoners. Though
quietly forwarded to England, the committee’s report,
when published in Sydney, provoked a strong public out-
cry against any form of transportation. Colonial opinion
had by jthis time hardened into virtually unanimous
opposition to any renewal of the system, and in September
1847 the Council repudiated the work of its committee.

While this was yet unknown in England, Earl Grey,
Gladstone’s successor, had prescribed a way of diluting
the bitter draught. He suggested sending ‘‘ticket-of-
leave” men as exiles to New South Wales, after they had
served the main part of their ‘‘times” in British peniten-
tiaries and on public works. Their wives and families
would be helped td^^join them, and free migrants sent in
equal numbers. But Earl Grey’s plan involved the re-
proclamation of New South Wales as a “receptacle” for
convicts. The step gave rise to such an explosion of wrath
in Sydney and Melbourne that Governor Fitzroy sent the
next transports laden with “ Pentonvillains ” to Moreton
Bay (August 1849). Their landing at either of the southern
towns would have provoked riots. In all, less than 2000
of these “exiles” had been sent, but in 1850 and 1851 men
of all shades of opinion joined the branches of an inter-
colonial Anti-Transportation League. In the newly con-
stituted colony of Victoria, where free migrants were
dominant, their zeal against convictism was intensified by
an ugly inrush of “ Vandemonian” expirees and proba-
tioners to the gold-diggings. The Victorian Legislative
Council passed a bill restricting immigration from Van
Diemen’s Land to those who could prove their freedom
from the taint of penal servitude. It was vetoed by the
Crown, but the Colonial Office had already yielded on the
main issue. After 1852 no more convict transports were
despatched to Tasmania. The squatters of Moreton Bay

FAMILY LIFE

155

petitioned more than once for assigned convict servants,
but in vain. When in 1859 the new colony of Queensland
was created, only a few survivors remained of the penal
settlement there.

Within a decade of 1853, when transportation to
Eastern Australia ceased, Britain was unable to deliver
from her gaols the thousand convicts a year that Western
Australia was anxious to see employed on her roads and
public works. In part the change was the outcome of
Peel’s mitigation of the criminal code. With the aid of his
new Police he made certainty of detection a better deter-
rent from crime than savage sentences against the small
proportion of criminals who were caught. The wholesale
depopulation of Ireland after the potato famine and the
new prosperity in Britain that had come with rising gold
prices alike relieved the pressure of poverty in the United
Kingdom.

Since transportation ceased, Australian governments
have often busied themselves with the problems of attracting
free migration, but the “ill odour in which government
emigration was and is held among the superior class of
hard-working men”^ has been intensified by every suc-
cessive attempt. Reacting strongly against the “evident
selfishness” of the systems propounded by Wakefield and
Ben Boyd, the writer just quoted — though conceding that
poverty, real or comparative, was, and ought to be, the great
recruiter for emigrant ships — stickled at the favourite de-
ception of the emigrant with the notion “that some other
country is more pleasant to live in than his own”. “All
schemes based on a mere desire to get rid of troublesome
paupers or to supply rich colonists with cheap servants will
fail and always have failed. To be continuous and not
spasmodic emigration must be for the benefit of the
emigrant. ” When Sidney wrote, the easy gains to be made
on the alluvial diggings offered to many, for a time at least,
abundant benefit. Before and since that decade, however,
1 S. Sidney, The Three Colonies of Australia^ 1852, p. ix.

156 FROM TRANSPORTATION TO

the man who sought to persuade migrants to venture from
Britain to a far land, whence return was difficult, laboured
against real difficulties. The dull servitude of agricultural
and pastoral labour before gold was discovered was not
unknown in Britain. The hardship, the distance and cost
of the voyage were great. In the days of transportation the
voyage out was counted the worse half of the sentence.
During th^ decade when transportation had ceased and the
gold was yet unknown, low passage-money was a necessity
for those making the journey in pursuit of the wage-
earner’s humble standard of life. As soon as the policy
of land-sales came into vogue, some of the revenue thus
derived had been set aside to pay the passages of free
labourers; and so great was the disparity of numbers
between the sexes that this category was interpreted as
including unmarried women. The excess of men in the
colonies certainly su'ggested that at the Antipodes emi-
grant women might pursue with some confidence the am-
bition of matrimony. In 1832 a ship went out with women
and children from the charitable institutions of Dublin
and Cork. Plans for repayment of passage money worked
badly, and after 1835 unmarried women were granted
official as well as virtually free passages. Labouring families
were assisted by liberal grants. In 1836, however, the poor
quality of the migrants gathered by shipping agents anxious
only for full government cargoes led New South Wales to
send three naval surgeons to select the best applicants.
‘‘No females were to be accepted unless they belonged to
or accompanied a family group. The men, preferably
under thirty years of age and married, were to be one-
third agricultural labourers and overseers, two-thirds
mechanics.” Thus, even before self-government, colonial
authorities sought to improve by selection the evil quality
of the human material which Britain had first thrust on
them.

To some colonists, it is true, selection did not seem neces-
sary. On grounds of expense New South Wales dropped

FAMILY LIFE

157

her appointment of special selectors in 1840, and made
the new Land and Emigration Commissioners her agents
in the matter. “The real objection”, thinks Sir Timothy
Coghlan, “was that the immigrants, being of a superior
type, were disposed to look for higher wages than the
settlers were willing to pay, and the married man with a
family was apt to seek to ‘better himself’, whereas the
settlers sought to have men who would remain with them
permanently.” Now that transportation was coming to
an end, they wanted shepherds and hut-keepers in addition
to the agricultural labourers, overseers and mechanics
sought by government. A bounty system was started by
which, apart altogether from government selection, private
persons might bring out approved numbers of migrants so
long as these complied with certain age limits and oc-
cupational rules. The first intention (1839) was that by
this means colonial employers might bespeak in the United
Kingdom the labour which they needed. Such a close
correspondence between demand and supply soon vanished,
if in fact it ever obtained. The increase of the bounties
to cover the full cost of the passage made the recruiting
of bounty immigrants an easy speculation for ship-owners.
In 1839, 2814 were brought out, in 1840, 6675 and in
1841, 20,103. Having no claim on the government that had
selected him, the bounty migrant was forced by his necessity
to accept the first job that offered. In 1 840 the local govern-
ment found that it had given permits for the bringing
of 71,315 migrants of this kind and had pledged itself to
find ;^979,6oo. Luckily, when “the Bad Times” came,
the Land and Emigration Commissioners took alarm at the
number of bounty emigrants setting forth, suspended their
own well-managed selection of emigrants for whom the
land fund provided, and did their best to supervise the
vessels and emigrants sent out under the bounty scheme.

But the damage had been done. Bounty migrants,
largely from Ireland, where they were more easily re-
cruited, crowded on Sydney wharves and foreshores.

158 FROM TRANSPORTATION TO

homeless and unprovided for after the ten days grace
allowed on board the immigrant ship. The second colonial
boom had burst, and employment was paralysed by waning
credit and low prices. Sixty-four girls who had just landed
possessed between them 14^. twenty-two being literally

penniless.

Into this hopeless scene came Caroline Chisholm, ‘‘a
second Mpses in bonnet and in shawl”. ^ She was a
yeoman’s daughter, from Northamptonshire. At 22 she
had changed the name of Jones for that of Chisholm,
marrying a Captain in the East India Company’s Army.
They and their family came in 1838 to spend a period of
sick leave in New South Wales. One of their first ex-
periences in Sydney was an encounter with some High-
landers, wandering disconsolate and workless through
inability to speak English. Chisholm, having Highland
blood in him, turned interpreter and set them on the way
to success as wood-cutters.

His wife’s interest in emigrants needed little kindling.
In early childhood an old soldier visiting her father had
excited her curiosity by his tales of other lands, and his talk
of them as colonies where emigrants might reap fortunes.
The idea at once spurred her to childish action, and her
first attempts at colonization were carried on in a wash-
hand basin, before she was seven years old, with boats of
broad beans, and touchwood dolls. With these she con-
trived a busy family migration and sent the boats, filled
with wheat, back to their homeland on the other side of
the basin.

In Sydney she found herself face to face with the realities

^ London Punch*.

“Who led their expeditions and under whose command
Through dangers and through hardships
sought they the Promised Land?

A second Moses, surely, it was who did it all?

It was. A second Moses in bonnet and in shawl.”

For her life and work see Mackenzie’s Memoirs of Mrs Chisholm, 1852, and
Margaret Swann’s Caroline Chisholm.

FAMILY LIFE

159

of emigration — hundreds of homeless girls with neither
friends nor protection. For three years, there and at
Windsor, she did what she could to find places for them,
sheltering many in her own home. It was in 1841, how-
ever, when her husband was recalled for service in China,
and the financial collapse increased unemployment, that
her efforts became public in scale. At Easter of that year
she decided to devote herself wholly to this urgent task,
and in it “to know neither country nor creed News-
papers and public men admired her projects but privately
assured her that she was attempting the impossible. Sir
George Gipps told her she much overrated her powers of
mind and declined to help, but finally gave her the use of
an old building for her Immigraiits’ Home.^ For four
nights she fought for possession against rats, and finally
won with the aid of arsenic.

There she began a systematic campaign. Her free
registry office substituted proper agreements in triplicate
(one being filed at her office) for the verbal “contracts
of service” which had till then left servants helpless before
the masters and magistrates. A day school kept children
from the streets. Her first report of the work of the Home
showed that within a year 735 young women had been
provided with situations; 291 going to the country dis-
tricts. The Governor, as soon as he realized her genius
for detail, franked her letters so that she might place
country labour more easily. This was a valuable help when
to send a half-ounce letter to Parramatta cost 4^., to
Windsor or Campbelltown 7</., to Bathurst lod., and the
postage for 300 miles was a shilling. Her inquiries about

^ See Margaret Swann, op. cit. p. lo. In her wash-basin experiment
she “had a Wesleyan minister and a Catholic priest in the same boat”.

2 Sir George’s account of her first interview with him gives a glimpse
of Mrs Chisholm in the flesh and the spirit : “ I expected to have seen an old
lady in white cap and spectacles, who would have talked to me about my
soul. I was amazed when my aide introduced a handsome stately young
woman, who proceeded to reason the question, as if she thought her reason,
and experience too, worth as much as mine”. See, for other contemporary
descriptions of her, Margaret Swann, op. cit. p. 5.

i6o FROM TRANSPORTATION TO

the places offering were thorough. Sir George Gipps was
at first a little perturbed at their range. “When I gave you
the privilege of franking”, he told her, “I presumed you
would address yourself to the magistrates, the clergy and
the principal settlers, but who, pray, are these John Varleys
and Dick Hogans of whom I have never heard since I have
been in the colony? ” She replied that if she had inquired
of prominent settlers they must have gone to their over-
seers and would have then answered her vaguely. “I want
to know what number of labourers each district can absorb
and of what class and what wages. I have applied to
men humble but intelligent, able to afford exactly the
information I require.”

Success in finding country places for the girls was
baulked by their fear, probably justified, of making bush
journeys by dray. They hesitated to set out alone. Mrs Chis-
holm went with th'em. Quickly the journeys grew into
expeditions under her command, not of girls only, but
of immigrant families. These became the invaluable nuclei
of a social development in fostering which she was doubly
faithful to her girlish vision of family migration.

Beginning with journeys to Parramatta, Liverpool,
Campbelltown and Maitland, she was soon venturing as
far as Goulburn, Bathurst, Yass, Gundagai and the Mur-
rumbidgee. At times she was on the road for as long as
five weeks. One party numbered 147 men, women and
children on setting out, and grew en route to a maximum
of 240. She would ride ahead on her favourite horse
“Captain” while the migrants followed by dray. From
farm to farm, from homestead to homestead, she sought
places for them, judged the mutual fitness of place and
servant, drew up agreements and meantime supplied her
charges with their daily needs.

Her general plan was first to place a female servant,
relying on the rivalry of housewives to make the coming of
one the stimulus to a demand for many. The girls married
best among the farms, but even the stations, with their

FAMILY LIFE

i6i

prejudice against “encumbrances”, did not baffle her
strategic cult of the family. She would never set about
match-making direct. There was little difference to a
squatter or farmer, she reasoned, between a single man’s
wage and rations and those of a married couple.^ She would
persuade an employer to engage a married couple and, if
need offered, use them as employers of the eligible girls.^

■ She was not, however, a mere match-maker by instinct,
led on by a sympathy with the joys of matrimony. When
an admirer praised her masculine mind, he meant to note
her finest quality — insight into the main defect of trans-
portation and subsidized migration. Great alike in brain
and heart, she knew that the unit cell of society is a family.
She settled ii,ooo souls in new homes during the decade
before the gold discoveries, and deliberately evolved a new
art of family colonization. To her mind it was not good
husbandry to uproot individuals from a crowded land, to
cull the worst and cast them out on a rubbish heap, and
then, when some throve in the rotting mass, to call it a
new, garden. She saw that, as certain plants can only
thrive together, the sexes must be balanced to make a
sane community. Between 1840 and 1850, the period of
her greatest prestige and activity, the ratio of males to
females in the Australian colonies dropped from 2 : i to
1*43 : I. The number of females in all colonies was 63,102
in 1840 and 166,673 in 1850: of males 127,306 in 1840 and
238,683 in 1850. Confining attention to New South Wales,
and taking the dates 1836 to 1851 in order to exclude the

^ The rate of wages for a single man then averaged £20 per annum
with weekly rations of flour 9 lb., meat 10 lb., tea 2 oz., sugar lb. A man
and his wife with one child £2^^ per annum and a double ration.

® E. Mackenzie, op, cit, p. 67, reports “On one of her first journeys she
was met by a discontented party of emancipists, shepherds and shearers of
the district who said: ‘We believe you are a very good sort of a person,
Mrs Chisholm, and have great respect for you, but we cannot allow emigrants
here to lower our wages’. Her answer was, ‘I hear you want wives. Is that
true?’ The reply was a universal ‘Yes’. ‘Then, don’t you see, I can’t send
single girls to a district where there are only bachelors. Let me fix a few
married families down on the different stations, and I will send to them
decent single lasses that you can marry*.”

i62 from transportation to

free settlement at Port Phillip, one obtains more striking
figures:

New South Wales Population

Year

Males

Females

Ratio

1836

56,677

22,252

2-55 : 1

1851

”3,155

84,1 10

1*34 ; I

The credit due to Mrs Chisholm is not that she achieved
these results but that she altered the attitude of the com-
munity towards female immigration and by spreading
family life raised the self-respect of all grades and set new
standards in the development of social life.

The worst feature of transportation, she held, had been
that it denied its victims the normal motives of human
ambition, ability to hand on to one’s children the lore of
family life, a very present immortality and a renewal
of youth. To her the convicts were victims of a “close and
galling bondage”', “incarcerated together by hundreds
like a menagerie of wild beasts” — “victims of a principle
promulgated but too successfully by a modern popular
author”.^ At its worst the system produced the horrors
of Port Arthur, and filled the gaols and asylums for long
after 1840 with the demented wrecks of prison discipline.
But none escaped unbranded, and the solitary hopeless
life in the bush into which the old hands drifted only
confirmed “the frightful and deteriorating effects of this
more than savage life”.

Her deliberate aim was to bring to all in Australia the
opportunity of family life. Accustomed in her journeys to
find shelter at the nearest hut, and to share the hospitality
of all classes, she had learned to know the kinder side of the
emancipist settlers, “their extreme, nay, nervous anxiety
regarding the welfare of their children— the efforts they

^ * The phrases are quoted from a letter on “Emigration and Transporta-
tion Relatively Considered” which she addressed to Earl Grey in 1847.
The “modern author” would seem to be Jeremy Bentham, and his
Panopticon v. New South Wales, Constant Inspection the only security against Escape
(1812).

FAMILY LIFE

163

make to educate them — the miles they travel to attend
a place of worship — their deep sympathy for the un-
fortunate— their Christian liberality and charity — their
open-hearted hospitality She denounced and sought to
remedy the effects of a system ‘‘that has doomed tens of
thousands to the demoralising state of bachelorism”. She
appealed to the “paternal government” to entitle itself
to that honoured name by promoting family and female
migration. “For all the clergy you can dispatch, all the
schoolmasters you can appoint, all the churches you can
build, and all the books you can export will never do much
good without ‘God’s police’ — wives and little children.”

In such a cause she obtained unstinted support from
almost all in the colony. A prominent member of the
Legislative Council asked her to draw on him for any
money she required on her journeys. But in the country
districts none would accept payment for the needs of her
charges; she at no time found need of his help. By 1843
her plans were taking wider scope. She did not relax her
efforts to find places for migrants. A contemporary de-
scribes her^ “making forced marches at the head of
armies of emigrants, as far as 300 miles into the far
interior, sometimes sleeping at the stations of wealthy
settlers, sometimes in the huts of poor immigrants or
prisoners; sometimes camping out in the bush, teaching
the timid, awkward peasantry of England, Ireland and
Scotland how to ‘bush’ it; comforting the women, nursing
the children, and putting down any discontented or fro-
ward spirits among the men; now taking a few weary
children into her covered tandem-cart, now mounting
upon horseback and galloping over a short cut through
the hills to meet her weary caravan, with supper foraged
from the hospitable settlers.”

She realized very soon that in ninety-nine cases out of
a hundred the emigrants had come in hopes of obtaining
land and independence. The best way of national coloniza-

^ Samuel Sidney, The Three Colonies of Australia (1852), pp. 155-6.

11-2

i64 from transportation TO

tion would be to settle families on small farms. The
Governor and his Council, however, were left under the
new constitution of 1842 without power to “interfere in
any manner with the sale or the appropriation of the lands
belonging to the Grown in the colony or with the revenue
thence arising”. And the minimum price, raised from I2i.
to a pound an acre, at which the Land and Emigration
Commissipners sold land on strict Wakefield lines, de-
barred small settlers, both because of their poverty and the
less lucrative use they could make of the land, from com-
peting at land sales against the shepherd-kings.

Baulked of the aid in family land-settlement which
Governor Gipps would gladly have given, Mrs Chisholm
found a wealthy landowner. Captain R. Towns of Shell-
harbour, willing to give her 4000 acres on which to make
an experiment, togetlier with five months’ rations for
her party. There itl^December 1843 she settled a group
of 30 families, including over 240 persons. She watched
over their early troubles and nursed to humble success a
little colony of 30-acre farms.^ In 1846, having built up
a stable organization for placing migrants in New South
Wales, she returned to England to found a national scheme
of colonization.

In London she quickly created “The Family Coloniza-
tion Loan Society” which encouraged the migration of
undivided families by supplementing their savings with
loans. After a winter of pleading backed by full proofs of
actual instances, she extorted from the Land and Emigra-
tion Commissioners a remedy for the evil of families divided
by partial emigration. Two shiploads of children were sent
from British workhouses to rejoin their parents oversea.
Free passages for convicts’ wives and families were more
sparingly given. With the active aid of leaders of opinion
like Lord Shaftesbury and Sidney Herbert, the Family
Colonization Loan Society conducted a vigorous educa-
tional campaign in favour of New South Wales. “Tell the
^ See S. Sidney, op, cit, pp. 153-4.

FAMILY LIFE

165

truth. The country can stand it” was Mrs Chisholm’s
watchword, and she was able not only to arouse great
interest and energy in emigration, but also to charter
ships and institute sweeping changes in the accommoda-
tion and food on board. For this she was attacked by
shipowners, who did not scruple to suggest that all her
philanthropy cloaked plans to enrich herself. The ‘Slains
Castle’, the first ship to fly her blue flag with the
monograms F.C.L.S. and C.C., sailed with 250 passengers
in September of 1850, and was followed at six-monthly
intervals by others. Where the Emigration Commissioners
had allowed from 600 to 800 to be carried, these vessels
chartered by the Loan Society carried less than 300. By
1852, however, news of che gold discoveries had reached
Britain and the need of Mrs Chisholm’s labours to find
colonists was over. After her return to Australia in 1854,
she remained there for twelve years. One of her first
activities was to persuade the new Victorian Government
to erect rough shelters along the tracks to the diggings.
But her health was broken, and her constant insistence on
the need of unlocking the land dimmed her popularity
with some. Between 1862 and 1866 she kept a girls’
school in Newtown, Sydney. She was given a pension of
£100 a, year by the Crown and died in 1877.

Work such as hers could not be undone. The Land and
Emigration Commissioners renewed in 1844 their sending
of selected migrants — agricultural labourers, shepherds
and domestic servants — 4500 of whom went out under
their auspices in 1844-5. Thereupon a committee of
the Legislative Council asked in 1845 for ,^12,500 per
annum for three years, with which to renew “bounty
immigration”. They adduced in support elaborate calcula-
tions of the new land and increased flocks that would
absorb the newcomers’ services. The assumption of un-
checked and abundant prosperity wtis perhaps not as
naive as it sounded. Governor Gipps put aside their
pleading, thinking the effect of such a renewal would be

i66 TRANSPORTATION AND FAMILY LIFE

to flood the labour market again and to force down wages.
The land revenue was not as buoyant as these pastoral
hopes, and he put the annual need of fresh labour at
4000 only. No funds, however, were available in 1846
and 1847. There was talk of Indian coolies, and ofa limited
trial of Chinese and South Sea Islanders. In 1 848 loans on
the security of future land sales were raised to promote
selected immigration again, ;^50,ooo being allotted to
Sydney district and a like sum to Port Phillip. The more
humane and business-like handling of migration was
shown in the reservation of half the passage money until
the selected migrants had been landed in Australia and
their treatment en route had become known to the authori-
ties there. The new spirit prompted, too, the provision
of depots for the reception of new arrivals at country
centres such as Goulburn, Bathurst, Maitland and Moreton
Bay, where they wefS lodged at government expense until
offered work at rates deemed fair by the superintendent.

Other societies formed to promote emigration, such as
Sidney Herbert’s Female Emigration Society and the
Highland and Island Emigration Society, were not as suc-
cessful in their choice of migrants as Mrs Chisholm’s
Family Loan Colonization Society. Like her organization
they failed to collect the sums advanced to eke out small
savings and pay passage money, but the migrants they
selected being less worthy of support, they received no such
grants from the legislature as maintained her Society’s work,

Mrs Chisholm’s crusade for family life was a personal
task, the realization of an enthusiast’s dream. In the
decade of confused trekking to and fro by excited diggers
from the first gold discoveries to the final rush to Otago
in 1861, family desertion was painfully frequent all through
Australia. Mrs Chisholm’s effort may then have seemed
vain and soon forgotten. Her plea for access to the land,
even when freely granted in form, for long seemed equally
barren of the consequences hoped for. Yet both are very
real achievements in Australia to-day.

CHAPTER XI

The Gold Rushes of 1851—1860

The grant by Britain of colonial self-government,
to the Eastern Colonies in 1851, to Western
Australia in 1890, was immediately followed in
each instance by energetic discoveries of gold. The causal
relation is not plain but the economic and political results
were revolutionary. Gold drew in new populations which
swamped the old colonists, and which, as their easy gains
from gold declined, used the new political freedom for ends
of their own, not approved by the pastoral communities
they had disturbed and reinforced in numbers.

The Crown Colonial officials in New South Wales did
not welcome the finding of gold. They may fairly be said
to have delayed it in the interests of prison discipline and
a quiet life. In 1823 ^ convict produced a small nugget
which the officer in charge promptly took to be stolen gold
melted down; the discoverer was duly flogged. Rumours
of other finds floated around shepherds’ huts and Sydney
bars. Officialdom frowned. A Polish explorer. Count
Strzelecki, told Governor Gipps in 1839 of gold-bearing
pyrites near Lithgow. Gipps bade him be silent and
similarly advised the Revd. W. B. Clarke, a schoolmaster
and amateur geologist, when he too found gold in 1841.
A British geologist, Sir Roderick Murchison, came to the
conclusion, from a study of published papers on Australia,
that gold would be found there. He based his argument
on the similarity of the mountains with the Urals, and
urged that unemployed tin-miners from Cornwall should be
sent to look for it. Earl Grey at the Colonial Office snubbed
him for his enthusiasm, and such “cousin Jacks”

as were

i68 THE GOLD RUSHES OF 1851-1860

assisted to migrate turned their steps to the South
Australian copper-mines. Even a mild rush to California
only half thawed the chill with which officials thought of
similar doings in New South Wales. A certain W. J. Smith,
who in 1849 showed the Colonial Secretary a nugget em-
bedded in quartz, was offered a reward in proportion to
the value of the find. He declined terms that would have
thrown him upon the generosity of an evidently hostile
and sceptical Government.

In 1851 the atmosphere suddenly changed. In February,
E. H. Hargraves, a squatter who had returned from
California, tested his theory that the rocks and flats near
Bathurst closely resembled the gold-bearing country over
the Pacific, and found it true. Taking the gold to Sydney,
he persuaded the Colonial Secretary that an announce-
ment would stop emigration to California and end all
possibility of renew'^d transportation. He accepted the
offer which Smith had declined, and within a few weeks
his “Ophir” field had infected the whole colony with the
gold-fever. By mid-May, 400 miners were “puddling’’ for
nuggets and gold dust. From stations, farms and city
streets came “new-made miners, some armed with picks,
others shouldering crowbars and shovels, and not a few
strung round with wash-hand basins, tin-pots and cul-
lenders”.^

It was now the pastoralists’ turn to take fright at the
consequences. Some asked for martial law and a down-
right prohibition of gold-digging. The latter was actually
proclaimed by Governor Denison in Van Diemen’s Land
in 1852, avowedly in the interests of “the ordinary pur-
suits” of the colony. Governor Fitzroy proclaimed the
gold to be legally the property of the Grown, and required
all miners to take out monthly licences to dig for it. These
were to be issued at 30^. a month by resident Commis-

^ Quoted from the Bathurst Free Press, 17 May 1851, by G. V. Portus,
“The Gold Discoveries and their First Effects”, appearing in vol. vii, ch.
IX, of the Cambridge History of the British Empire, the most spirited and
thoughtful account of the period.

THE GOLD RUSHES OF 1851-1860 169

sioners. The Sydney Morning Herald doubted the efficacy of
such restraints. It clung to the hope “that the treasure
does not exist in large quantities”. Should it do so, “let
the inhabitants of New South Wales and the neighbouring
colonies stand prepared for calamities far more terrible
than earthquakes or pestilence!” (19 May). Standing,
however, was the last thing the inhabitants were prepared
to do when in July a certain Dr Kerr produced a mass of
gold and quartz containing 1272 ounces of gold which an
aboriginal shepherd had knocked off the outcrop of a reef.
A new field called the Turon became the scene of a rush
of men more excited than ever.

The colony of Victoria, separated from New South
Wales on July i of that year, made a prompt bid for
a share in the “calamities”. It was intolerable that
separation should be, even in appearance, the occasion for
the loss of the most active spirits in its population of 77,000.
In Port Phillip District, too, there had been tales current
of shepherds’ finds, and the inevitable “man named
Smyth” had been told by Superintendent Latrobe in
1844 to hush up a discovery of gold on the Ovens River.
A Gold Discovery Committee (9 June 1851) now offered
a reward for the finding of gold within 200 miles of
Melbourne. It was immediately claimed by W. Campbell
of Strath Lodden near Clunes. Louis John Michel brought
in samples of gold-bearing quartz from Anderson’s Creek.
Thomas Hiscock of Buninyong found gold a few weeks
later on the south side of the Dividing Range, and the
Ballarat diggings nearby soon eclipsed all previous finds
by their amazing richness. Early in September, Melbourne
papers received word of very rich diggings that had been
quietly developed since mid-July at Mount Alexander.
In December, Henry Frenchman found at Golden Gully
the first of Bendigo’s big deposits. During 1851, gold
worth over a million pounds was won in Victoria, which
became the centre of attraction before the gold discoveries
were known overseas. The Victorian fields were from 70

170 THE GOLD RUSHES OF 1851-1860

to 100 miles out of Melbourne. The Dividing Range was
an easily crossed watershed quite unlike the formidable
Blue Mountains behind Sydney. In the size and abundance
of their nuggets and surface enrichment the diggings were
unique.^ Governor Latrobe reported having seen eight
pounds weight of gold washed from two tin dishes of
dirt. Three years later a nugget weighing 98I pounds,
found on Dalton’s Flat during a visit by Governor and
Lady Hotham, was called the ‘‘Lady Hotham” in her
honour.

Ordinary mortals could not be expected to regard such
wonders as calamities. The diggings seemed rather the
first real chance of independence that Australia had
offered the poor man. Childhood’s dreams were coming
true. Wealth in big lumps might be picked up from the
ground. All that was necessary was hard work with pick
and shovel, turnings over the soil in gullies where long
ages had washed down and lightly covered the unheeded
metal. Food was rough, and water often scarce. Colonial
fever, as typhoid was then called, was soon prevalent
about the makeshift camps. But to men inured to a bush
life these were trifles when weighed against the virtual
certainty of high holiday from sheep and loneliness, and
perhaps the means of returning to the old land rich and
respectable ever after. Until September 1852 most of the
diggers were pre-gold colonists concentrated into Victoria
from station, farm and township. Nearly a quarter of the
population of pastoral days, it is said, tried their luck
along the gullies in the Great Divide. Expirees, emancipists,
free-immigrants, escaped convicts from Van Diemen’s
Land, policemen and civil servants, sailors and clerks,
shepherds and shopkeepers went digging and puddling
where, with persistence and energy, fortunes were to be
won by the simplest method.

But not all were diggers. The idea of selling goods
to the fortunate at fancy prices occurred to so many that

^ For a list of famous nuggets see the Australian Encyclopaedia, vol. i, p. 561.

THE GOLD RUSHES OF 1851-1860 171

at Bathurst, the first diggings, prices in June 1851 were
below those ruling in Sydney. In Victoria, however, the
proffer of new gold wais so sudden and so strong that the
level of all Australian prices (taking those of 1896-1900 as
base, 1000) rose from 1036 in 1846—50 to 1607 for 1851—5.
The main source of quick trading profits from the diggers
was the sale of spirits. Up to the end of 1853 the
Victorian Government refused to issue publicans’ licences
on the diggings. Opinion on the goldfields attributed this
to the influence of the Melbourne public-house keepers.
The lucky digger with his bag of gold-dust was expected
to come to town and there replace the station-hand or
shearer with his cheque. Whether that charge was well or ill-
founded, the sly-grog shanty became a regular feature of the
mining camp. As beer was too bulky to be easily smuggled,
the grog sold was usually spirits. Teamsters could always
be found who would risk the loss of horses, dray, harness
and cargo plus a fine of fifty pounds. Brewers’ casks were
much in demand on the fields for “puddling” the gold-
bearing dirt, and very handy to stow goods in during wet
journeys by bullock team. Detection was not easy, and if
the worst happened bribery was not unknown. What
charges the traffic would bear may be deduced from the
average of ^(^1500 a week for cartage which a Ballarat
publican is said to have paid during part of 1853. The
sly-grog shop bore no sign and carried small stock. Its
front curtain was always down, but the way in was well
known, the storekeeper being usually a “ tout ” and sleeping
partner. When the evening gun, fired near the Com-
missioner’s tent, put an end to the day’s strenuous digging,
the lull of the meal-time was soon followed by a roaring
business to which the police were ordinarily deaf and
blind.

In general, however, the mining camps surprised ob-
servers by the order they maintained. Their capacity for
spontaneous organization in religious congregations and
in the usual Anglo-Saxon multiplicity of sporting, social

172 THE GOLD RUSHES OF 1851-1860

and friendly societies enabled Governor Latrobe to re-
constitute his police and civil service, and to convert, with
no more disorder than his own and his advisers’ blunders
provoked, a fortuitous collection of newcomers into a self-
governing community.

The Victorian Government in 1851 was a mere scaf-
folding. The Imperial “Act for the better government of
Her Majesty’s Australian Colonies”, 1850 (13 & 14
Victoria, cap. 59) set up a Legislative Council, two-thirds
of whose members were elected on a ten-pound rental
franchise. This meant a present supremacy of the old
squatter leaders. But the Act endowed the new Council
with power to draw up a new bi-cameral constitution.
Thus its moral authority was overshadowed; its status being
that of a house of caretakers under notice to quit. It repre-
sented a landed interest at loggerheads with the Governor
as to its legal title ter the land and by no means willing to
welcome an upstart industry spreading everywhere and
threatening to paralyse pastoral pursuits. In November
1851 the Council declined to find from general revenue
the cost of governing the mining camps. Latrobe, in the
habit of following Governor Fitzroy as his official superior,
continued to levy the licence fee imposed in accordance
with Californian precedents before Victoria’s separation
from New South Wales. He considered the licence plan
unsound. It penalized heavily the unsuccessful diggers.
He would have preferred an export duty by which diggers
would have contributed to the cost of government in
proportion to their success. But that would have placed
the revenue, as part of Customs and Excise, within the
power of his factious and inexperienced Council. He
certainly needed more revenue. Diggers could average,
men said, an ounce of dust a day. It was little enough,
in the circumstances, to offer a constable 6j. a day. To
pay this he sought in December 1851 to impose a doubled
licence fee of^3 a month. The gold-miners, knowing that the
Council was pressing the Governor to grant pastoral leases

THE GOLD RUSHES OF 1851-1860 173

for long terms, raised a great clamour against this doubling
of the “poll-tax” on their own energies. With few police
and only 80 soldiers to enforce his commands, Latrobe with-
drew. The Legislative Council, whose hostility had tied
his hands, then passed a resolution favouring the levy of
an export duty on gold in place of the unpopular licence
fee.

The knot should have been cut when in June 1852 word
came from Britain giving the local legislatures control of
the licence fees from gold-digging, and suggesting that
whatever additional revenue was needed might be raised
“either by an export duty on gold or by a royalty”. But
an Export Duty Bill, proposed as an added impost, not
as a substitute for licence fees, was howled down on the
diggings. The outcry against it, very probably, was in-
spired by the gold-buyers, who represented that it would
necessarily reduce the price they could pay for gold dust.
Doubtless this was so, but they had been giving as little
as 55^. an ounce, at least a pound less than the mint value
of gold, and were discussing the relative qualities of the
“colonial gold” won on the different fields.

Thus antagonism between the diggers and the Govern-
ment was already marked when in September 1852 the
first wave of a new type of free immigration broke on
the shore of Hobson’s Bay. The newcomers came mainly
from Britain. Nineteen thousand landed in Melbourne
in September, and 94,664 during 1852, seven times
as many as the arrivals during 1851. Only 1648 of these
were foreigners. Possibly the exceptional qualities of the
foreigners, many of them exiles of the 1848 disturbances,
impressed their contemporaries. More probably the in-
sular prejudices of a population that had hitherto been
selected from those under British jurisdiction made it gape
at every foreign type. There were sources enough, without
looking beyond the United Kingdom, for the indignant
radicalism which soon leavened the mining camps. The
hungry ’forties and the Chartist movement, the Irish

174 THE GOLD RUSHES OF 1851 — 1860

potato famine and Smith O’Brien’s “rising” had repressed
in the old country popular ambitions to make a new social
order by political or revolutionary action. In Victoria the
emigrants, whose very coming showed them to be men of
confident initiative, faced no such repressive powers. At
first they were too intent upon trying their luck inland
to care for politics. Dumped pell-mell with a medley
of goods^ on Liardet’s Beach (later Sandridge and Port
Melbourne), they sorted themselves out in Canvas Town,
trudged or rode through the scorching dust-laden north
wind, or, in the bitter winter of 1853, picked a way over
the muddy tracks to Ballarat or Bendigo. They felt no
respect for a ruling oligarchy without traditional dignity
and but lately seized of power. Whatever the Legislative
Councillors and Governor Latrobe might seem to the
old hands, to these newcomers, soon a growing and
self-conscious majoraty, they were men using temporary
political power to fasten on a new country a land mono-
poly like that whose claws the Anti- Corn Law League had
lately clipped by popular agitation. Throughout the colony
the diggers won wealth where these men had missed it.
Yet when the easy gold gave out they found themselves
debarred by new land laws from acquiring the stake in
the country which, they were told, was the proper con-
dition of a share in its government.

The diggers proved ready critics. Now it was Tas-
manian ex-convicts who excited their scorn, now Chinese
intruders. Those who returned to Britain shocked their
home-keeping firiends with tales of the rough life and
rougher people on the stations and the diggings, of the
snares that lurked in Canvas Town south of the Yarra and
beyond the ken of the police, of the quagmire three-parts
of a mile wide across the Keilor Plains which served as
the road to Bendigo and Mount Alexander.^

^ See The Diggings, the Bush and Melbourne , by James Armour, Glasgow,
1864; “The Gold Diggers”, by G. B. Newling, Journal of the Royal Australian
Historical Society, vol. xi, pp. 262-80; and “Gold Seekers of the Fifties” in
The Argus, May 1899.

THE GOLD RUSHES OF 1851-1860 175

They had reason for much of their criticism. Neither
officials nor legislators showed imagination or fore-
sight in shaping channels for the broadening current of
Victorian life. The population reached 236,798 in 1854,
whom 68,790 were able-bodied miners on the gold-fields.
In the following year it passed that of the mother colony:
in 1857 the population of Victoria was 410,766 and that
of New South Wales 305,487. But though rich alluvial
finds continued and the total yield remained amazing, that
total fell from 6, 776,250 in 1852, the anniis mirabilis^ to
;(^8, 661,161 in 1854. then, three times as many were
digging as in 1852.^ To men led into an uncouth life by
the motive of monetary gain through fi^ee and intense
effort, this waning of their chances made the monthly
licence fee an offence and an irritation. It was clumsily
collected by a police force recruited from old Tasmanian
military warders, London Metropolitan Police — culls, no
doubt — and inexperienced youngsters locally pitchforked
into a rank of ‘‘cadets’’, between commissioned and non-
commissioned officers. Periodic “digger-hunts” were
made by parties of police armed with fixed bayonets.
Diggers caught working without the licence were marched
to the “lock up” or even chained to a log outside the
Commissioner’s tent, to be heavily fined when they
came under his summary jurisdiction. These digger-hunts
were insultingly reminiscent of searches for bushrangers or
runaway “government men”.

Only a lead was needed to stir mass resentment into
action. It was given unwittingly in June 1853 by a pro-
posal in the New South Wales Legislative Council for the
abolition of licences. The revenue from the fees was not
important there. In August, after a short and orderly
campaign known from the badge they used as the Red
Ribbon Agitation, the Bendigo (V.) diggers sent a deputa-
tion to ask Governor Latrobe to reduce the licensing fee

^ T. A. Goghlan, Labour and Industry in Australia, p. 587, bases these figures
on the estimates made by dealers in bullion.

176 THE GOLD RUSHES OF 1851-1860

to los. a month, and to explain to him their subjection
to armed force, their lack of access to the land, and their
desire for a voice in making the laws. Latrobe answered
that at 30J. a month the revenue from licences did not
meet the cost of governing the fields. The miners’ delegates
talked to popular audiences in the capital of 1 00,000
diggers ringing Melbourne with fire, and were applauded.
Reinforceinents from “The Fighting Fortieth” were sent
to Bendigo Camp and their coming was met by a general
refusal to take out licences. A hasty measure was passed
by the Council reducing the fee to £2 for three months.
The formal refusal to reduce it to lOJ. a month was
intended to save the face of a legislature nervous of being
“dictated to” by the mining population, but the con-
cession emboldened the element that talked of using force.
Stump-orators grew fonder of comparing the military
resources and prow«ss of the diggers with those of the
government.

When Latrobe left the colony early in 1854, order had
been maintained at the diggings, but only by a big sacrifice
of revenue and authority. The new Governor was Sir
Charles Hotham, a naval officer as sure of the value of
discipline as Latrobe had been conscious of the injustice
of the licence system. A severe commercial crisis had
followed speculative over-trading, and the diminution of
revenue from imports and licences had left a public deficit
of a million sterling. Hotham called on the Commissioners
to mend matters by a stricter collection of the fees due.
In 1 854 a new rush had gathered the worst elements from
the various diggings to Eureka Valley in the usually
orderly Ballarat field. In October a digger was stabbed
at the door of a rough “hotel” in an altercation “after
hours”. A venal magistrate acquitted the owner, an ex-
convict from Tasmania, and a mob of some thousands
thereupon swept the police aside and burnt the hotel.
Hotham, after inquiry, dismissed the magistrate and
ordered a new trial. The hotel-keeper was convicted of

THE GOLD RUSHES OF 1851-1860 177

manslaughter, but three of the incendiaries were also
sentenced to prison. A force of 450 soldiers and police
was sent to keep order. Thereupon the ‘‘Ballarat Reform
League” demanded of the Governor the release of their
comrades and talked of revolt against “tyranny” and of
a Victorian Republic. Hotham firmly refused the “de-
mand” for release, inviting the spokesmen to temper it
to a petition. He explained, in answer to talk of political
rights, that a constitutional amendment giving votes to all
licence-holders had been sent for the Queen’s approval, as
such amendments had always to be sent, but that if they
would elect a representative he would at once nominate
him to the Council. With clumsy obstinacy they repelled
his conciliation and reiterated theli “demands”.

At Ballarat, on their return, a tall German called
Vern began a provocative public burning of licences.
At the next “digger-hunt” the Commissioner and his
men were pelted with stones. The diggers bought up and
seized arms; drilling began. On a rise in Eureka Camp
they built a crude stockade of stakes, ropes and broken
carts. The miners obtained some ammunition by rushing
a military convoy; shots were fired into the government
camp. Captain Thomas decided not to wait for General
Nickle, known to be on the road with reinforcements. By
a surprise attack early on Sunday morning, 3 December
1854, the stockade was carried, the rebel flag, a white
Southern Gross on a blue ground, was hauled down and
120 insurgents were marched off to prison. An officer and
four soldiers lost their lives, and so did 30 of the garrison.
Thomas had admirably timed his rush when the family-
men among the rebels were spending the week-end at
home.^

Governor Hotham insisted upon the trial of the leaders
for high treason, but juries refused to convict. One at
least, Peter Lalor, made lifelong political capital out of

‘For more detail see H. Gyles Turner, Our Own LittU Rebellion^ pp. 64-75,
and W. B. Withers, History of Ballarat.

178 THE GOLD RUSHES OF 1851-1860

his escapade. He became a Minister of the Crown and
Speaker of the Legislative Assembly. But neither “the
last picturesque pose of an order that was passing”, as
Mr Portus aptly sums up the Eureka episode, nor the
measures passed at the instance of the Royal Commission
which was sitting when it occurred, could save alluvial
digging. The Commission recommended an annual licence
or “Mi/ier’s Right” (qualifying for the suffrage as well),
at a fee of one pound. It favoured also an export duty
of half-a-crown per ounce of gold, a poll-tax on Chinese
immigrants, and the sale of land in small blocks near the
gold-fields. These changes were made mostly in 1855, but
the land reform came much later. No laws, however,
could prevent the exliaustion, by the diggers’ own restless
energy, of the gold available at shallow depths.

The Victorian gold yield rose again in 1855 to a value
of 1 1,708,088, •and in the following year to almost

1 4,000,000; but gold mining, as Governor Fitzroy had
predicted in August 1851, had become an industry of
companies and capitalists. The number of alluvial miners
continued to increase. It rose from 68,790 in 1854 to
82,428 in 1857 and 83,1 16 in 1861, but the Victorian yield
fell off again to less than 3^1 1,000,000 in 1857 and less than
;()8,ooo,ooo in 1861. An ever-increasing proportion of the
gold became the property of the companies’ shareholders,
who installed machinery to work the ground systematically
and at depths the diggers could not reach. Steam was
first used in crushing quartz during 1855. By November
1861, 711 steam engines were generating 10,782 horse
power on the fields.

Two influences buoyed up the diggers’ hopes of keeping
open the free man’s chance. On some fields the partly
elective local courts, which the 1855 Act substituted for
rule by Commissioners, set their faces against amalgama-
tion of claims. On the Mount Alexander and Mclvor
diggings their preference for individual mining prevented
the more economical but socially less attractive company

THE GOLD RUSHES OF 1851-1860 179

system from gaining ground. At the Ovens, at Bendigo
and at Ballarat, consolidation proceeded steadily. In place
of individuals with their methods of shallow sinking and
tub-and-cradle work came larger parties who, with a
little capital, made good profits by turning over systema-
tically the partly exhausted shallow ground. This was
known as “paddocking’’. Claims were combined or an
area taken conjointly and the whole body of ground cut
away systematically on a face. “Headings’’ which would
not pay the handwashing digger were put through a
circular trough, or horse puddling-machine. Harrows
attached to cross-bars were dragged by horses travelling
round the circumference of the trough while a stream
of water flowed through it. Even so the “paddocks”
were but alluvial deposits, and this systematic work com-
pleted the exhaustion begun by the individual diggers.
When deeper ground had to be worked, and reefs or lodes
followed down, well-timbered shafts called for more
capital. Steam-batteries became a pre-requisite to pudd-
ling or more complex processes of treatment. Whatever
the courts might wish to see, such methods meant wages-
men and “bosses” rather than prospectors “on their own”
or even as working partners.

More substantial was the aid given the diggers by the
establishment in 1855 Sydney Mint. As a result the

miners did not feel the new export duty, for they then
obtained for the first time approximately the mint value
of their gold. Hitherto gold-buyers on the fields, partly
by taking advantage of their clients’ ignorance and partly
to offset the banks’ charges or the risks of transport to
the coast and to Britain, had given less than yos, an ounce.
The presence of the Sydney Mint, freely coining gold into
sovereigns at the rate of lys. io\d. per standard ounce,
forced the dealers to give the local equivalent of that rate.^

^ The pastoralists benefited substantially also by the presence of the
Mint, for the greater ease in making specie remittances put an end to the
wide fluctuations in exchange rates which, in the early days of the gold rush,
had operated as a burden on all trade.

12-2

i8o THE GOLD RUSHES OF 1851-1860

Nevertheless, such a price-change, being necessarily
limited and possible only once, could not long stay the in-
evitable catastrophe. By the end of the 'fifties, the Victorian
diggings were too thickly peopled to keep up the standards of
extravagant living to which miners had grown accustomed.
The scenes of the later rushes proved all too limited in
resources to reward the numbers that swarmed off from old
hives. In 1858 there was a rush to far-away Canoona near
Rockhampton, in what became Queensland during the year
following, but this venture ended in such misery that the
governments of Victoria and New South Wales were
constrained to bring back many of the 10,000 who had
gone, in order to save them from starvation. Many of
them tramped past the scene of the great Mount Morgan
mine of later years. Men of New South Wales, returning
disappointed from Victorian diggings, increased the yield
of the older colori^s gold-fields from £674,477 in 1857
to £1,806,171 in 1861.

In Victoria the struggle for a living was embittered by
the presence at the diggings of large numbers of Chinese.
A few had appeared in 1853; by March 1854 they
numbered 2000. There were 25,370 Chinese in Victoria by
the end of 1857 and 20,000 of them were digging for gold.
They would not work for wages under white “bosses”,
many of them being bound financially to their own
countrymen.^ If better chances did not offer, they could
make a living by re-washing “tailings”. Wherever they
appeared there was bad blood between them and the
white diggers, charges of the most varied character being
made against the Celestials. They were “picking the eyes
of the fields”. But had not all come to do that? They
were insanitary in their habits, and immoral. They took
money out of the country. Popular outcry dictated a
Chinese Restriction Act in June 1855 by which every
Chinese coming into Victoria was subjected to an entry
tax of £10. Ships were forbidden to carry more than one
Chinese to every ten tons registered measurement. All

^ See P. C. Campbell, Chinese Coolie Migration in the Empire, passim.

THE GOLD RUSHES OF 1851-1860 i8i

Chinese resident in the colony were subjected to an annual
poll-tax of , which was raised in 1 858 to £6. “ Protectors
of Chinese” were appointed to enforce these taxes and to
control Chinese camps.

The raising of the poll-tax in 1858 marked a realization
that other obstacles did not prevent the Chinese firom
coming. In formidable numbers they made their way to
the diggings across country from Guichen Bay in South
Australia and from the south coast of New South Wales.
After 1858, the heavy poll-tax and the waning alluvial
yields sent many across the Murray from Victoria to the
New South Wales diggings; yet there were still 25,000 in
Victoria at the 1861 census. New South Wales had then
1 2,988, mostly engaged in gold-mining. Popular dislike was
shown there in a Restriction Bill passed in 1 858 by the Legis-
lative Assembly but rejected by the Council. The Council’s
hands were forced, however, by outbreaks of violence in
December i860 and January 1861 at a new field called
Lambing Flat or Burrangong.^ A Miners’ League virtually
superseded the Commissioner and police as local authority,
and twice drove the Chinese off the field. Foot, horse and
artillery were sent from Sydney to restore order. The
Premier, Charles Cowper, followed with counsels of
moderation and promises of legislation. His first proposal
was to segregate the alien miners on certain fields to be
proclaimed as open. Fresh riots at Lambing Flat and the
acquittal of those accused of participation punctuated the
passage of this Act and of another drafted on the lines of
the Victorian measure (passed November 1861).

The Colonial Office was embarrassed by the incon-
sistency of the New South Wales Act with the Convention
of Peking, signed with China in i860 by Great Britain and
France. In this Convention, Chinese emigrants had been
conceded, at the instance of the European powers, “perfect
liberty” to take service in British colonies and to ship

^ There had been a similar ^meute at Buckland River diggings in
Victoria on 4th July 1857. For details of the Lambing Flat riots see T. A.
Goghlan, Labour and Industry in Australia, p. 777,

i82 the gold rushes OF 1851-1860

themselves and their families on British vessels. The new
Act was allowed because of the “exceptional character
of Chinese immigration” to Australia. In form it was
certainly unlike the indentured labour which the framers of
the Convention had intended to promote, in opposition to
the traditional Chinese prohibition of emigration. When,
however, the Chinese diggers had been deterred from
coming o;- had been driven home again by poll-taxes, by
popular violence and by waning alluvial yields — they seldom
ventured below as wage-earners in deep mining — the
Chinese Restriction Acts were repealed in all the colonies
— by South Australia in 1861, by Victoria in 1865 and by
New South Wales in 1867. But the deep-seated animosity
of the Australian working class against Chinese competitors
was not extinguished. It blazed again in 1875 on the Palmer
diggings in far northern Queensland, and was so notorious
in the ’nineties thafrmo Chinese ever ventured to dig for
gold on the Western Australian fields. It was not their
vices that provoked animosity; they were orderly and
content to be left alone. The prejudice against them was
fundamentally economic, the resentment of a free-spending
folk against men whose racial standards of effort and
endurance bore the marks of stern competition to survive.
Every habit of theirs was a threat to impose such standards
on Australia.

As events shaped themselves, the gold rushes did not
materially alter the preponderance of British blood in the
colonies. The census returns of i86i showed the following
percentages of population classified according to birth-
place:^

Birthplace Victoria New South Wales

Australia ... ... ... ... 2g.2

British Empire (outside Australia) 61-4 46*2

Foreign countries 8*6 6*6

Unspecified ... ... ... o-8 0*2

All countries loo-o 100 0

^ Tables quoted, G. V. Portus, op, cit.

THE GOLD RUSHES OF 1851-1860 183

The best informed of Australian historians holds that
‘‘the strong current of vigorous manhood attracted to the
country on the discovery of gold’^ overwhelmed the ex-
convicts and “recipients of assisted passages obtained by
charitable agencies” who had formed the ordinary popu-
lation of pre-gold days.^ But he is not blind to “the
indifferent material of a large minority of the people who
came to Australia during the gold rushes.. . .During the
quarter century following the gold-rush, thousands of
persons whom no inducement to better their condition
could incite to steady work lived almost from hand to
mouth, without care or thought for the future”.

In their days of good fortune, the newcomers clamoured
for democracy, and it was given them. The constitutions
shaped by Legislative Councils during that decade of
excited progress were quickly revised in response to the
cry of the easily enriched for a right to mend all ills by
new laws. Chartism was orthodoxy among them. Its
dominance is plain both in the methods and in the pro-
gramme of the Bendigo Red Ribbon Association (1853).
Manhood suffrage became law in South Australia in 1855,
in Victoria in 1857 in New South Wales in 1858.
Vote by ballot came at about the same time, and triennial
parliaments have made the laws of South Australia since
1856 and of Victoria since 1859.

If democratic laws could reshape for the better the
means by which folk get their living, the way was open
and the will was there. At the end of the decade the
pressure on legislators became urgent. The Australian
population had risen from 405,000 in 1851 to 1,168,000
in 1861. Under the stress of diminishing returns in mining,
the diggers clamoured for economic reform. The inde-
pendent took up Mrs Chisholm’s cry for homes on
the land. Others joined the unemployed of Sydney and

^ T. A. Coghlaiij Labour and Industry in Australia^ pp. 874-6. Cf. his
discussion of the permanent traces of convict blood in Australia,
pp. 561-2,

i84 the gold rushes OF 1851-1860

Melbourne and demanded government works.^ The latter
palliative, however well it agreed with older colonial
practice in road-making and public building and with the
poor-law relief of which many had been recipients in
Britain, in no way solved the problem. It did not neces-
sarily broaden the basis of colonial production or make
room for the permanent settlement of the restless pro-
spectors. Whether it could do so depended on the expan-
sion of economically sound industries. Both land settlement
and public works programmes were enacted in every state,
as will be shown later.

Yet the gold which so greatly reinforced Australian life
went mainly to confirm the strength of the pastoral industry.
Of the wonderful legacy unearthed by alluvial digging —
£125,000,000 in gold — the Victorian population had the
first use of some £110,000,000. It was spent mainly
on meat, drink and clothing in the first instance, and
thus more than made amends for the dislocation which
the first rushes had brought to the farms and stations.

The demand for more meat at higher prices quickly
caused the closing of the few boiling-down establisWents
which remained. Meat prices in Melbourne rose from i \d.
in 1851 to \d. and %d. in December 1852 and ij. in May
1854. Later in that year they fell forty per cent., but in
1857 good joints of beef cost %d. a pound and mutton ‘]d.,
and these prices rose to \ \d. and ^d. respectively in 1858."

In comparison with other commodities, meat seemed
cheap to the newcomers, and their consequent adoption
of Australian meat-eating habits made them very pro-
fitable customers to butchers and stock-raisers. The good
market for meat and the less demand for labour on cattle

^ Three planks in the economic programme of the Labour Movement of
later generations may be traced in the demands of the Sydney unemployed
in 1858-60, viz.: (i) opposition to piecework, (ii) preference for government
employment, and (iii) belief in reduced hours of work rather than maximum
earnings. See T. A. Coghlan, Labour and Industry in Australia, pp. 700,
71 1, 726.

* As to prices at this period see generally T. A. Coghlan, Labour and
Industry in Australia, part iv, chapter viii, pp. 783-829.

THE GOLD RUSHES OF 1851-1860 185

runs caused an increase in the proportion of cattle, and this
helped to promote the occupation of new country, mainly
in northern South Australia and Queensland.

Everywhere fencing, as already described, enabled the
squatter to lessen his total labour-costs. Ex-digger con-
tractors also brought a new energy and economy into the
transport of wool and stores, previously carried out by
unreliable station hands. Most striking of the transport
changes due to the new volume of Australian trade was the
fall in freights on wool. Faster and bigger ships came out in
greater numbers, bringing full cargoes of eager immigrants
and eagerly bought goods. Wool went as back-loading for
freights as low as a half-penny a pound, and the abundance
of shipboard space removed the necessity for “dumping”
or compressing the bales, a practice which had eJways
troubled the London brokers because of its effect on the
appearance and “handling” of the wool. To the squatter
the best consequence of the gold discoveries was the rise in
prices in which his wool shared to the full. Both Victorian
and New South Wales wool doubled in market value
during the 1851-61 decade.

The pastoral industry, havingsuccessfully solved its labour
problem by fencing the runs, and having added to its oversea
market a growing local demand for meat, came out of the
period of stress stronger both in possessions and in pro-
spects. Agriculture was at first harder hit, but benefited
equally by the bigger demand for its wheat and dairy pro-
duce, and recovered by paying similar attention to labour-
saving. Less than half a million acres were under crop in
1850 and over a million in 1858. But the farmers were not
yet able to feed the colonial populations and could win
no such profits as those which enabled the pastoralists to
buy out the free selectors of the next period. History and
geography still joined in raising high the squatter’s tWne.

BOOK TWO

COLONIAL PARTICULARISM
i860 — 1900

CHAPTER XII

O <<^|» O

“Unlocking the Land” in
New South Wales

The names of Cumberland, Argyll, Cornwall,
Buckingham, Gloucester and Glamorgan — which
were given to the counties into which the coastal
area near Sydney was divided In 1829, to those of Van
Diemen’s Land — spoke of a purpose to make a southern
Britain there. And, doubtless, the Colonial Office felt in
1831 that at five shillings an acre purchasers of colonial
land were being endowed with the means to found new
county families, gentle and simple, squires and yeomanry.
The systematic colonizers thought of smiling farms, with
ploughland, hedgerow and meadow pushing back the
primaeval forest. By 1839, however, the Secretary of State,
Lord Glenelg, realized that in some untidy way flocks and
herds were occupying the back country before the named
counties had been properly cleaned up by “combinable
labour”. The Wakefieldians explained that the price set in
1831 had been too low. “The check which it was intended
to impose upon the undue dispersion of the inhabitants of
the Colony had not been sufficient.” Governments have
been fighting that “undue dispersion” ever since, some-
times by free selection for agriculture, sometimes by sub-
sidies and protection to “industries”.

By new regulations Glenelg raised the price of land to
twelve shillings an acre, and brought on a land boom.
Here was an asset whose value had been raised 140 per
cent, in a day. Collapse followed in 1841 , as it must follow
every mania for buying Itmd regardless of the net income

igo “UNLOCKING THE LAND” IN

it can yield. The good Wakefieldians sitting as Land Com-
missioners in Westminster diagnosed the malady as the
outcome of Glenelg’s timidity in working the magic wheel
of land-sales, emigration and settlement. They persuaded
Lord John Russell to raise the upset price to a pound an
acre, and hoped to stimulate sales and revenue, while
curbing speculation, by selling the land at a flat rate
rather >than by auction. All thrifty folk might then share
in the unlimited bargain, and with the proceeds ample
labour could be sent out to construct roads and buildings
worthy of a new and freer community.

This dream of neat farms and combinable labour ignored
the pastorahsts with their flocks and herds, making their
slow way over the dusty inland plains, now passing the
precious flour, tea and sugar over a flooded stream on a
tarpaulin raft, now checking the bullock-waggon down a
“breakaway” b^ hitching on a fallen gum-tree — those
skirmishing explorers whose wild doings seemed flatly
contrary to the dogma of concentrated settlement.^

Governor Bourke, in October 1835, confessed that he
could not “avoid perceiving the peculiarities which in
this Colony render it impolitic and even impossible to
restrain dispersion within Hmits that would be expedient
elsewhere”. The Colonial Office, not living in a warm
temperate land and fearing that he was unsound on the
fundamentals, lectured him for his lack of faith. There
was unlawful squatting in old Wales, he was told, and of
course in every new country. But “under a good and
responsibly administered law of colonization colonial
squatting would be as rare as the invasion of private estates
in this country”. Bourke was not abashed. These squatters,
he replied in effect, are not gipsies but the very leaders of
colonial prosperity. “ Not all the armies of England, not
a hundred thousand soldiers scattered throughout the
bush, could drive back our herds within the limits of our

^ The ideal of concentrated settlements was not the Wakefieldians’ in-
vention. Gf. Report of Committee on Transportation^ i8i2, p. 4.

NEW SOUTH WALES

191

Nineteen Counties.*’ He wholeheartedly supported his
advisory Council in an Act that granted annual licences
to the occupiers of “runs” of indefinite extent “outside
the bounds of settlement”, charging them ten pounds
apiece for licence and run. To settle boundary disputes
by local ideas of equity and good conscience, he named
district Commissioners of Crown Lands. These steps gave
official recognition to the occupation of the “unsettled
areas”.

This was worth much. The squatter was becoming a
Crown tenant; he had a right to his run, which, once it
was noted by a friendly Commissioner of Lands, was good
against everyone but the Crown. Fights over boundaries
and water-rights, formerly settled arms in hand, gave
place to legal enforcement of possession. The tract of
country occupied by the squatter and his establishment
was legally in his possession. He could bring an action
against any intruder; so ruled Chief Justice Stephen.^ “He
was not bound to show his title. He simply said ‘the
Crown does not interfere with me and I had possession
before you came in’.” To provide a border police, an
assessment on each squatter according to the number of his
stock was imposed by the Legislative Council in 1839. The
power of government was to be made effective in the back
country.

Neither Bourke nor his successor Sir George Gipps had
the least inclination to treat the squatters as “systematic
violators of the law”. “As well might it be attempted to
confine the Arabs of the desert within a circle drawn on
the sands”, Gipps informed Lord John Russell (19
December 1840), “as to confine the graziers or wool-
growers of New South Wales within any bounds that can
possibly be assigned to them: and as certainly as the
Arabs would be starved so also would the flocks and herds
of New South Wales, if they were so confined, and the
prosperity of the colony would be at an end.”

^ Quoted by Stephen Roberts, Camb, Hist, of Brit. EmpirCy vol. vii, ch. vii.

192 “UNLOCKING THE LAND” IN

But while impressing the graziers’ importance on the
authorities in England, Gipps opposed the programme of
further privileges for which they contended in his Council.
Under William Charles Wentworth they sought security
of tenure, compensation for improvements and first right
to buy their runs. Without the first and second they could
hardly be expected to build substantial homesteads, and
to make expensive improvements. Purchase, however, if
left to the squatters’ option, might mean such a picking
out of the oases that control settlement as had marked
the sale of “special surveys” in South Australia. The net
of a land monopoly would early enclose the land to the
prejudice of future comers.

Australian land was then regarded, both in Britain and
the colonies, as a trust vested in the Colonial Office for
the benefit of generations to come.^ Gipps’ superiors at
home held that tKe free access of graziers to the land con-
flicted with that trust. The Australian pastoralist, they
reasoned, had no more right to occupy the waste lands
of New South Wales, without Her Majesty’s express
sanction, than a Berkshire farmer had to feed his oxen
on the Queen’s demesne of Richmond or Hampton Court.

Gipps, under such pressure, resisted the squatters’ de-
mands for security, and they, caught in “the Bad Times”,
made him the scapegoat of their sudden penury. Yet in
reality he was contending for the admission of their
freedom to use the land, while maintaining his trust by
refusing them virtual ownership and monopoly. When in
1844 he judged the worst of the financial collapse and
drought to be past, he tried to expedite recovery by
increasing the number of pzistoral runs — a first essay in
“bursting up the big estates”. He persuaded the Council
to constitute each twenty square miles one run, subject to

^ As late as 1882, a Newcastle surveyor, W. Christie, in Our Land Laws,
wrote: “The land belongs to the people. We have no more right to the
appropriation of the whole of it or any part to the prejudice of posterity
than the First Fleet of colonists had to our prejudice, or than Captain Cook
had to claim the ownership to the prejudice of them’\

NEW SOUTH WALES 193

the annual charge of ten pounds per run. While he hoped
thus to find room for many more runs with a carrying
capacity of about 4000 sheep, he did not debar any
squatter from holding as many runs as he could use and
rent at a profit. Twelve out of the fifteen district land
commissioners had recommended this step.

In new Land Purchase Regulations (3 April 1844) Gipps
sought, further, to define each squatter’s “right to pur-
chase part of his run”, granting security while avoiding
exclusion. Each run-holder, he proposed, should be re-
quired to purchase his homestead block of 320 acres at
the end of five years’ occupation, and a similar area in
addition after every eight years. If the run-holder would
not buy, any other purchaser might obtain the run by paying
the retiring holder the value of liis improvements. The plan
offered the pastoralist a regulated pre-emptive right which
meant either security or compensation. Its aim was to use
the Crown’s ownership of the land to enforce the admission
of the most vigorous users of it. Yet it provoked such an
outcry that within three years a Pastoral Association,
formed to resist it, bore down almost every safeguard
against monopoly.

Emotion rather than logic inspired the Association’s cry
of “Ruin or Rebellion”. Any suggestion of a new obliga-
tion was torment to nerves overstrung by speculation, by
drought and the despair of “boiling down”. The pastoral
leaders, with relatives in every British shire and clients in
every port or manufacturing town, brought heavy pressure
to bear on the Colonial Office. At first Lord Stanley
stood by Gipps and his regulations. Deputations, pam-
phlets and petitions poured in on his successors, W. E.
Gladstone and Earl Grey; and in 1847 Orders in Council
under a new Imperial Waste Lands Occupation Act (1846)
conceded in effect all that the squatters had asked—
security of tenure, “independent” valuation of holdings
and pre-emptive rights. The obsolete limits of location
between the coastal counties and the more productive

S H

194 “UNLOCKING THE LAND” IN

area “beyond the bounds of settlement” were dropped,
and the land was classified into “settled”, “intermediate”
and “unsettled” districts. In the settled districts pastoral
tenants might have annual leases only; in intermediate
districts they might have leases up to eight years’ duration,
subject to resumption with compensation at the end of any
one year; in the unsettled districts they could obtain leases
of not more than fourteen years. The pre-emptive right
given during these leases, though it did not prevent the
Governor from reserving land for public uses, excluded all
other purchasers during the term of the lease.''

Too late, the popular party, which had rallied under
Robert Lowe to vilify Gipps and support Wentworth,
saw that they had helped the squatters to gain a firm grip
of the land. Whether the pre-emptive right applied to any
part of the run and shut out all other buyers, as the
squatters argued, or covered only the homestead and the
sites of improvements, as the Duke of Newcastle read it in
1854, it certainly gave effective power to buy the “eyes of
the land” — to “peacock” the country as this was called.
“SirGeorge Gipps needs no defender now”, wroteaSydney
weekly as soon as the purport of the 1 847 Orders in Council
was understood.

When Port Phillip District became Victoria, the pas-
toralists dominant there managed by hard-driving in the
Legislative Council and in the law courts to obtain an
interpretation of the Order that obstructed all sales of
Grown lands under lease, save to the lessees. Latrobe
thereupon refused to issue leases, and the pastoralists had
to be content with yearly licences carrying the other
privileges intended by the Orders in Council but not this
exclusive possession. Under such licences or leases, how-
ever, nearly the whole of Victoria outside the mountain
mass in North Gippsland was in the possession of less than
a thousand pastoralists. As it was held that cultivation

' See V. and P. of N.S.W. Leg, Council, 1847, vol. i, no. 120, cap. ii,
sect. 6-9,

NEW SOUTH WALES

195

would create a presumption of permanence in their tenure,
the Orders in Council prohibited the pastoralists from
cultivating more land than was needed to grow grain, hay,
vegetables or fruit for their establishments. This prohibition
was relaxed somewhat during the years of dislocation, but in
1854 the squatters were officially reminded that they held
their land on pastoral licences, not as cultivators.^ Before
the gold rush, one of them had noted in his diary a private
opinion that the lands between Geelong and Bacchus
Marsh were the finest wheat fields in New South Wales.
Hobler wrote this when New South Wales was undivided.
In the new circumstances, pastoralist spokesmen were ready
to contend that Nature had “passed an eternal sentence
of sterility” upon Victorian land.

The implication that the pastoral runs were to be locked
up on this indeterminate sentence was anathema to men
who knew what had been done in similar climates else-
where.2 Before the diggings began, Victoria had been
producing nine-tenths of the wheat she consumed. The
area under cultivation fell while country labour could find
far higher rewards at the diggings and on the roads
thither. In 1855 ^ tenth of Victoria’s breadstuffs was

locally grown. The contention that this was due to sterility
was specially galling because California, by dint of granting
“homesteads” on easy terms to her surplus diggers, was
already exporting potatoes and flour to Australian colonies
of similar climate.^

^ Victorian Government Gazette ^ 24 April 1 854. “ His Excellency the Lieutenant
Governor directs it to be notified that as it cannot be considered necessary
for the welfare of the residents at the various gold-fields or other populous
districts that the cultivation of Grown Lands should still be permitted in
order to facilitate the better supply of the necessaries of life to them, the
provisions of Her Majesty’s Order in Council of 9 March 1847 (ch. 2, p. i)
subject to which the occupants of Grown Lands are licensed must be
respected and will be enforced.”

* Gf. W. Howitt, Landy Labour and Gold (1855), passim,

® Addressing a committee of the Melbourne Chamber of Commerce
(1855) ori the Waste Lands of Victoria, a merchant named Train cited “the
all-sufficient fact of their paying £2 1 per ton for Californian potatoes and
£40 to £50 per ton for American flour”. California, he said, “had been
four years in becoming an exporting country”.

13-2

•‘UNLOCKING THE LAND’’ IN

196

By i860 the progress of cultivation was again very
marked in all the colonies. Victoria had 387,000 acres under
crop, South Australia 359,000 acres, Tasmania 152,000 and
New South Wales 246,000. Yet the last-named colony was
importing in that year grain to the value of ^580,176, as
compared with 6,939 a decade earlier, and two-fifths
of Victoria’s bread still came from imports of flour and
whea^t.

The transitional governments did find ways to retain or
regain land from the pastoral net. In New South Wales a
million-and-a-half acres were reserved for public purposes,
which prevented the complete tying up of the land under
pastoral licence which troubled Latrobe in Victoria.^ In
both colonies a power was re-asserted in 1854 which had
been overlooked in the heat of controversy — power to
resume lands i^^the intermediate districts at the end of any
year. But more radical solutions were in the air. The
imperial Act granting self-government vested in the new
colonial legislatures “the entire management and control
of the waste lands belonging to the Crown” in each colony,
and also “the appropriation of the gross proceeds of the
sales of any such lands”. In the new legislatures the
pastoralists soon surrendered control to the democracy of
gold-diggers and other immigrants. But they handed on
with it no torch of enthusiasm for the interests of pos-
terity.

When manhood suffrage was granted in 1858, alluvial
gold-mining was palpably profitless. Thousands of diggers
had rushed to Burrangong (N.S.W.) in 1859, but by the
year’s end most of them were stranded in Sydney. Many
tried and missed again at Kiandra in the Australian Alps.
But why should this unprofitable scouting for gold con-
tinue over land of evident fertility and abundant rainfall?
Why did not the mother colony follow South Australia’s
lead and unlock the land for wheat and dairy farming?
A reform recently passed in Adelaide had greatly simplified

^ See S. H. Roberts, History of Australian Land Settlement , ch. xvii.

NEW SOUTH WALES

197

the sale and transfer of land.^ ‘^Forty-niners” from Cali-
fornia told of free selection on the prairies and the Pacific
coast. Recent British history showed that even a landed
aristocracy strongly entrenched could not stand against a
determined popular movement. So it became the law in
Sydney that every man, woman and child should have
the same chance to select a farm as John McArthur had
enjoyed at Camden in the Cowpastures. Surely there was
still enough for all in the 196 million acres that remained
of New South Wales after Victoria and Queensland had
been carved out of it.

The leader of this popular movement for “free selection
before survey” came from the ranks of the squatters them-
selves. John Robertson had been a youthful pioneer
“beyond the bounds of settlement”, but had no hkingfor
Wentworth’s campaign for security of tenure.^ He was a
Londoner by birth and, though afflicted with a cleft
palate, his good looks and rough candour endeared him
to a devoted political following for a full generation.^ In
1861, after a sharp constitutional conflict in the Legislative
Council, he pushed through both houses measures which
were designed to begin an agricultural revolution and to
give every family that desired it a stake in the country.
The first, a Crown Lands Alienation Act, permitted any-
one to select 40 to 320 acres anywhere from the Crown
lands, the limit being raised to 640 acres in 1875. Each
selector was to pay five shillings an acre, a fourth of the
price, when his “selection” was duly surveyed, and was to

^ See S. H. Roberts, History of Australian Land Settlement, pp. 21S et seq,
for the origins of the Torrens system of registering titles and transfers of
land, and its rapid extension.

® For another contemporary squatter’s critical analysis of the claims of
pasture and agriculture, sec Colin Campbell’s The Land Question : A Lecture
at Ararat, 1861 (Mitchell Library).

® B. R. Wise, The Making of the Australian Commonwealth, speaks of his
“natural gift of profanity” and tells how in his old age, when still the
admired oracle of the anti-Federal or Gecbung Party, a spirited young lady
told Sir John of a portrait of his which had appeared in the papers. It was
so like him that she had kissed it. “And did it kiss you back?” “Ohl
No, Sir John 1” “Then it can’t have been much like me.”

198 “UNLOCKING THE LAND” IN

reside on it for three years. The only evidence needed to
prove that he had done this was to be a statutory declaration
by the selector himself. The terms of payment of the
remaining three-quarters of the price were gradually made
easier.

This new “free selection” did not, however, supersede
the sale of Crown lands by auction; the two systems of
alienation were to be used simultaneously. Moreover, any
purchaser whatever, either by auction or on condition of
residence, might take up as a “pre-lease” three times the
area he had purchased. This “pre-lease” gave him a lease
of the land for grazing which ranked ahead of any other
lease. Yet it was only a lease, and as such was subject to
the new right of or liability to selection by any “ conditional
purchaser” as well as to the older form of alienation, sale
by auction.

The second 'K)bertson Act of i86i, the Crown Lands
Occupation Act, substituted for the pastoral leases under
the 1847 Orders in Council shorter leases for five years
only, and limited the lessee’s pre-emptive right to one
twenty-fifth of the run and to land on which he had effected
improvements.

These Acts, though their provisions considered sepa-
rately might each seem just and indeed generous, were, as
a code, without consistency, principle or sense. Ostensibly
the Acts opened the public estate to all in the colony who
wished to take it— residence and a deposit of ten pounds
being the only qualifications for entry into the scramble.
An attempt by James Martin in 1867 to be mindful of the
colony’s imperial trust and to reserve half a million acres
for immigrants was denounced by Robertson as “setting
apart land for the use of Turks and others” and failed
amid “shrieks, yells and view-halloos”. Already the pas-
toralists and “free selectors” had forgotten every other
claim and all sense of decency in a bitter contest to assert
their jarring legal rights.

Wherever the land was most suitable for sheep the

NEW SOUTH WALES 199

squatters’ wealth weighed down the scales.^ Half-a-century
later a friendly American critic of Australian policies
thought “the land laws of the colonies had consistently
disregarded the interests of the labourer and the man
without capital”.® The results may suggest this, but the
censure on the intentions of the colonial lawgivers is un-
deserved. But for that regrettable prejudice against “ Turks
and others” John Robertson might have been counted an
Australian King Goodheart who

In his heart had found a place
For all the erring human race
And every wretched fellow.

But economic fact warped his well-meant effort to follow
the precedents of the American prairies.

The Crown lands of New South Wales were no longer
the empty range of hunting tribes. For a generation or
more the pastoralists, whatever their legal status, had
made use of the grass those lands grew, and to such good
effect that their wool was world-famous and in annually
greater demand. Had Robertson and his followers been
less obsessed with the idea of spreading agricultural homes
as they had been spread in the American West, or, nearer
home, in South Australia, they might have realized that
grass was the mainstay of the whole rural population
in New South Wales, and that tillage was a risky and
subordinate matter. “In seventy out of seventy-four of the
counties in the intermediate division a patch of arable soil
is useless without pasture attached.” Perhaps it was a
repressed sense of this fact that moved the author of the Act
to attach to the right of free selection “the delusion of the
pre-lease” — the right to lease for grazing three times the
area purchased. But the weapon of free selection on all
Crown land turned in his hand and annulled even this touch
of realism.

^ For a survey of the contest, district by district, well furnished with
general and detailed maps, see Morris and Ranken’s Report on the Public
Lands and Land Laws, N.S,W., V, and P,, 1883, vol. n, pp. yi et seq,

* V. S. Clark, The Labour Movement in Australasia (1906), p. 27,

200 “UNLOCKING THE LAND” IN

As the leases under the Order in Council expired, the
Crown lands were thrown open to the free selectors. But
the pastoralists were still in effective possession, still en-
titled to lease their runs afresh and to use their pre-
emptive right to secure picked spots. No attempt was
made to partition the colony according to its local suit-
ability to agriculture or pasture. “Two separate forms of
tenure'were instituted by law, both authorizing the occu-
pation of the same ground. Such a course might have
been intelligible had it been a question of supplanting a
nomadic barbarism by civilized industry and social se-
curity; but the pastoralists were no barbarians, their runs
no primitive wastes. Their tenure, though legally inferior,
was economically stronger. The spread of their stock had
changed the very character of the pastures. As the sheep
ate out the saltbush, which in early days stretched from
the Lachlan to 'TPhe Murrumbidgee, grasses both native
and new took its place in a soil lightly tilled and com-
pacted by their busy feet. Dams, which when first put
down emptied in a few weeks, gained carrying capacity
through the puddling of thousands of cattle and sheep.®
The Riverina of the ’forties was more of a desert than were
the lands beyond the Darling a generation later. The men
who had initiated these changes and watched their favour-
able and unfavourable reactions on carrying capacity were
led by a law-made war to regard the free-selector who was
invited to “jump their claim” much as they had regarded
the blacks or as the diggers had viewed the Chinamen.
But they were well able to resist the intruders.®

Long afterwards, under wiser auspices, it came to be
seen that the agriculturalist could render great service to
pastoral neighbours, for in dry seasons his haystacks re-
placed the vanished “ top feed,” and the grasses and annuals

^ Morris and Ranken, loc. cit. Gf. R. J. Black, Our Land LawSy 1905, p. 5.

2 See Morris and Ranken, loc, cit, p. 1 1 1 and cf. R. G. Stapledon, A Tour
in Australia and New Zealand (1928), ch. ix et passim.

* For an instance of a feud in which blood was shed by both selector
and squatter, see C. Amero, Les Squatters et VAustralie Nouvelle,

NEW SOUTH WALES 201

grown on his stubbles raised the whole district’s carrying
capacity. But these conditions were long delayed. During
the ’sixties the seasons conspired with the squatters to defeat
agriculture in New South Wales and illustrated the liability
of the inland steppes, within the reach but on the margin
of both summer and winter rainfalls, to wide fluctuations
between drought and flood. 1 862 was a year of drought and
bushfires. In February 1863 there were floods on the coast,
but drought recurred inland until early in 1865. On the
coast flood followed flood until July 1864. A favourable
season in 1 866 was followed by floods with loss of life and
much property in 1867, then came drought, followed by
more floods in January 1868. In 1869 the Government
proclaimed a day of humiliation and prayer for rain. In
November 1870 several hundred settlers were homeless
after a fresh deluge. ^‘The farmers came to consider it a
mere chance whether they would be able to gather in a
crop or would lose the fruit of their labours by flood or
drought.” The area under crop in New South Wales grew
only from 254,283 acres in 186 1-2 to 378,592 acres a
decade later (1871-2), that under wheat from 123,468
acres to 154,030 acres. Meanwhile the sheep depastured
increased from 5,615,054 in 1861 to 16,278,697 in 1871.
The agricultural revolution had failed to materialise.

The free selectors turned to grazing and the combat
deepened. It was bad enough when ‘'cockatoo farmers”
tried to “jump” picked spots on the squatters’ runs; it grew
worse when every “sundowner” might set up as a rival
pastoralist. The Act of 1861 made no requirement that a
selection should be fenced, and sometimes the selector was

a mere blackmailer. “One George G selected 320

acres of land on a run in the G district. Shortly after-

wards he impounded over 700 head of the station cattle,
amongst them four bulls upon which he put each, the
cost to the station-owners being £y8, is, 5^.” George had
evidently chosen a “cattle camp”. “After this, one man
was constantly kept on watch for a period of five months,

202 “UNLOCKING THE LAND” IN

at the expiration of which time C deserted the selec-

tion and it became forfeited. He had neither stock nor
improvements on his selection but lived in a calico tent
only.”i It was futile for Sir John Robertson to retort that
his Acts had been “framed for honest men and not for
rogues”. It is the purport of an Act that the courts
enforce, and the provisions of Robertson’s Act armed even
honest men for conflict.

As the law stood until 1875, anyone, adult or infant,
might select his or her 320 acres.® Many a family settler,
by clubbing his own and his children’s selections, made
up a run of perhaps 3000 acres or even more. If, as
often in the Riverina, the whole family came from south
of the Murray, the result was the more galling. Inevitably
such a grazing selector overstocked his narrow run, per-
haps relying on his wheaten hay. In the first dry season
encroachment!* on the station pasture or dams would
result. To stop them the Act gave the squatter a complete
arsenal of weapons, offensive and defensive. The pre-
emptive right had enabled him long since to buy up water
frontages and such points of vantage. By taking a leaf
from the family-selector’s book, he could defeat the pre-
lease provision, setting employees or “dummies” to pur-
chase, as selections, the selectors’ grazing lease. Thus the
squatter would “hem in” the would-be grazing selector,
making his holding too small to be profitable. But pas-
toralists disliked “dummying”; “dummies” had a way
of turning nasty.® Auction-sales of Crown lands were
preferable; they were not difficult to arrange, for it was
through them the main revenue of the colony was obtained

^ Morris and Ranken, loc, cit. p. 155.

^ S. H. Roberts, History of Australian Land Settlement ^ p. 227, cites an
authenticated story of selection in the name of an unborn child. Put down
as Francis, the name had unluckily to be changed to Frances. J^.S.W*
Parliamentary Debates ^ 1887-8, vol. xxix, p. 3044.

® See Dummies and Mediums, Plain Directions and Hints to, by “Doodledum
Dummy*’, Kyneton, 24 July 1865, a pamphlet in the Melbourne Public
Library, setting forth the various ways in which a Dummy might exact
money from his principal.

NEW SOUTH WALES 203

and unpopular taxation avoided. If land were offered on
a sufficient scale, none but the station-owner would be
likely to bid. At the worst, rivals could be bought off^ or
left with areas unsaleable save to the station. The banks
and financial houses advanced the wool-men the money
needed to buy enough of their runs to secure the con-
tinuance of the main export industry.

To complete the serried array of the selector’s difficulties,
the Act empowered the Minister not only to allow land
to go to auction at the lessee’s request, but also to sanction
at discretion purchases by the lessee of land on which he
had effected improvements. Otherwise the roving eye of
the next selector might light upon the site of a new dam.
This was a frequent source of trouble out West. No lessee
was safe in improving Crown land. By abstaining from
taking possession until the last moment allowed by law, a
selector could permit the unsuspecting pastoralist to finish
a new dam at great cost: the pastoralist might then find
himself a trespasser on a selection it had cost the blackmailer
ten pounds to secure after the dam had been begun. As
much as £^00 was demanded for the fee simple in one such
affair. Similar trouble arose later over artesian bores. The
parties in this civil war became skilled in using every weapon
the law provided. Purchases by virtue of bogus improve-
ments might at times be a necessary preliminary to real
ones, but as a rule the improvements were as fictitious as
the selectors’ statutory declarations of residence. Perjury
and corruption vied with cunning and fraud.^

Over the broad inland plains the pastoralists held and
consolidated their runs by means of the very charter of
free selection. Wool and stock-raising, as they practised it,
gave a greater net income than the selector’s wheat or mixed
grazing. But their ultimate economic strength and success

^ The Warrnambool Examiner, 29 June i860, in an article reprinted in
The Argus y 3 July i860, accused the member for Portland of accepting a
bribe of £350 on condition that he refrained from bidding.

* Sec for some curious examples W. Christie, Our Land Laws (1882). The
author was a licensed surveyor.

ao4 “UNLOCKING THE LAND” IN

obscure the fact that the pastoralists were on the defensive.
Paying more than could then be obtained by cultivation,
they bought out many a genuine agriculturalist as well as
buying the selections by river or woolshed which had only
negative economic value. All such purchases were made
to evade an insecurity created by law. All needlessly
burdened the industry and lessened its capital resources.

In some areas, notably, but not solely, those unsuited to
sheep, much genuine settlement resulted from free selec-
tion. Thus in the Bega district, on the extreme south of
the coastal strip, a compact settlement of dairy farmers
took up holdings and grew maize and root-crops on the
river-flats. Easy communication with Sydney by water
made the sale of their produce very profitable. Yet even
here a preliminary survey would have saved much annoy-
ance through over-lapping selections. At the other extreme
of the coastline, ,^e Northern Rivers district, free selectors
cultivated maize and sugar by the Richmond and the
Clarence. Clashes occurred when they encroached on the
cattle stations in the hills, but the station owners learnt
to defend their runs by buying 40-acre lots at auction.
“No general”, it was said, “ever posted his troops in
more impregnable positions.”

Throughout the old-settled coastal districts from the
Macleay River to Moruya Bay, little direct harm resulted
from free selection. Selectors took up land alongside the
old grants, but brought neither class-warfare nor debt nor
monopoly. The old estates were freehold and secure.
Patches of good land — isolated in the mountain valleys or
hidden amid scrub, where, under another system, no sur-
veyor would have looked — were settled by free selectors,
sometimes with legitimate success.

On the New England and Monaro Tablelands, too,
positive results were won by selectors combining sheep-
farming with tillage. The squatters, unable to buy at
auction the freehold of their well-watered runs, most of
which were worth bidding for above the upset price of a

NEW SOUTH WALES

205

pound an acre, had perforce to admit the grazing farmer.
Selectors quarrelled more among themselves than with the
squatters. Dummying was freely employed to fill out
selectors’ holdings and to cancel pre-leases. In New
England 4405 selections had been consolidated into 1560
by 1883. On Monaro, under the snow-clad Australian
Alps, the natural combinations of summer and winter
grazing with tillage were established on holdings of from
two to twenty thousand acres.

It was on the Western Slopes, by the Darling tributaries
and in the Riverina, that feuds between squatter and free
selector wrought most havoc. However genuine the se-
lector’s first desire to make a home by wheat-farming, in
these areas of long drought his day was not yet. The
squatter could afford to wait patiently —

It is the land of lots of time
Along the Castlereagh,

— and he seldom waited in vain. Round Deniliquin in the
Riverina the selectors who remained in 1 882, out of 1 426 who
had applied for land since 1865, numbered 244; of these only
48 made any show of hving by cultivation. “Most of them
make little by it”, wrote the Commissioners, “but their
earnings are not disproportionate to their exertions. ” When
at long last genuine and dummies’ selections and squatters’
purchases had alike become station property, in outward ap-
pearance there was little to show for John Robertson’s great
idea but a few broken fences and some skeletons of huts.

Across the Darling on the far western plains

Where fierce hot winds have set the pine and
myall boughs asweep

the free selector, making a genuine bid to cultivate, was
unknown. Yet even here the Robertson Acts wrought
mischief. To prevent selection and, incidentally, to check
higher Crown rentals on the back country, the lessees
bought the water-frontages at auction, paying a pound an
acre. Where nothing less than nine square miles would

2o6

“UNLOCKING THE LAND” IN

make a homestead even at favoured spots, family selection
was not to be expected. Yet by 1882 some 1229 selectors
had taken up 407,000 acres. Two-thirds were “dummies”,
and not one in five pretended to make a home. “ Shanties ”
were commoner than farms. Debiting free selection to-
gether with the loss of revenue from the leaseholds for
which this improperly condoned “peacocking” was re-
sponsible, it may be reckoned that the three hundred
shanty-keepers,^ dummies and selectors in the Western
Division had by 1882 cost the colony £10,000 each. In
so level a country that lost revenue might have built a
thousand miles of railway.

The concessions in Robertson’s Acts to the claims of
both land-seekers and land-holders not only armed them
for a social strife inimical to orderly settlement but
created confusion and complexity in a department of law
which above all^ihould be simple and intelligible. For
the land laws “affect the interests of a class who, though
enterprising, are generally unlearned, and affect them to
a degree beyond all comparison in the ordinary affairs of
life”.^ Answering complaints of delay in the issue of
selectors’ titles, the Surveyor-General (1880) reviewed the
administrative outcome. “There are nine stages in each
conditional purchase, ten in each improvement purchase,
at which all plans and papers touching the case must be
brought together, whereas in simple auction measure-
ments, or measurements in advance of demand, where no
conflicting interests are to be considered, the few plans and
papers required need only be together twice — on receipt
of the measurement and at presentation of the deed.”

Even if a conditional purchase went through without a

^ The menace of the shanty may be gauged from two references in Morris
and Ranken*s Report N.S.W., V. and P, 1883, vol. ii, pp. 122, 143: “The
erection of a shanty, and consequent demoralization of the shearers and
station-employees soon bring the lessee to almost any terms, and the trouble-
some selector merely abandons the land to seek some other place where
he can carry out the same scheme”,

* G. H. Reid, Pari, Deb, i88i, vol. ii, pp. 1495

NEW SOUTH WALES

207

hitch, the 27 stages of its course at ‘‘the Lands’’ took a
minimum of eleven and a half months. “Draftsmen em-
ployed in charting have to observe 74 rules, 65 of which
may apply to a conditional purchase, and 36 of them are
fundamental, the infringement or neglect of any of which
might compromise the office.”

Sir John Robertson had rejected the tidier plan of
settlement after survey in order that independent free-
holders might not be baulked of the little properties on
which their hearts were set. This was the ideal — a race
of yeomen — which had made him the popular hero and
evoked enthusiasm throughout Australia. Had the tur-
moil and waste been offset by this great social gain? Had
family settlement been won, even at an economic loss?
In 1883 the official returns showed that since 1862 some
129,571 conditional purchases had involved the alienation
of 15,421,877 acres of Crown lands, being more than
twice the area (6,365,000 acres) alienated in all ways
before 1862. But agricultural activity had not kept pace
with this free selection. The area under crop had increased
by only 329,545 acres in twenty years.

Were there any social gains? What had become of the
129,571 selectors and their chosen spots? Under scrutiny
by the 1882 Commissioners it appeared that only 62,000
purported to be “residential selections”, the rest being
“additional” purchases. Selectors who were actually
resident numbered less than 20,000, perhaps not 18,000.
They fell into seven types, (i) Dummies who selected
in the pastoral lessees’ interests, to prevent others and
secure the runs, numbered, at an estimate, six-twentieths.
(2) Those selecting with the aid of dummies and, before
1875, children, to obtain areas large enough for grazing,
numbered four-twentieths. (3) The few selectors with
capital enough to practise agriculture on sound lines, a type
more valuable than all the rest together, numbered only a
twentieth. (4) Those who by dogged energy succeeded fairly
as farmers and paid their instalments, were about three-

2o8

‘‘UNLOCKING THE LAND’’ IN

twentieths. (5) Those “poorin money, education and intelli-
gence, unable to compete in the ordinary occupations of life ”
who took up small selections, eked out miserable lives for
a time, and finally sank into dummying, formed five-
twentieths. People of this type, having votes, would not
fail to agitate for fresh advantages, remission of interest
and so on.^ (6) Blackmailers, selecting merely to be bought
off, totalled perhaps a fortieth; and (7) Those who would
take up selections, at 5^. an acre deposit, rather than pay
timber licences, and would cut out the timber and forfeit
the selection, numbered another fortieth.

One acre in every fourteen of freehold had been culti-
vated when the Robertson Act was passed, one in thirty-
nine in 1880, one in fifty-four in 1891.^ The bulk of the
land alienated by conditional purchase as well as by
auction had gone to the pastoralists and had given them
“the perfect st^urity of freehold”.' By 1881 ninety-six
land-holders had freehold estates covering eight million
acres, averaging 84,000 acres each. Such was the agricul-
tural revolution effected by unlocking the land to free
selection before survey.

Indirectly, the Robertson Acts wrought havoc in the
moral standards of all classes. “The social effect of the
system”, thought the Commissioners of 1883, “has been
to bring into the country too many of the poor and un-
thrifty who have been bolstered up temporarily by the
laws, but must eventually be a burden to the com-
munity.^’ The whole atmosphere of life in the country was
tainted by the many temptations to evil-doing which the
Robertson Acts left open. Perjury became a common-
place in the lives of all settlers, young and old. The country-
side was studded with dens in which horse-thieves found

^ Over ten millions of selectors’ purchase-money were outstanding in
1882.

^ By 1891 New South Wales had alienated or agreed to alienate 45,732,000
acres, including 21,325,476 under the conditional purchase (Robertson)
system. See Report of Lands Department , 1892, V, and P. 1892-3,

vol. IV, p. 321.

NEW SOUTH WALES

809

harbour and sympathy. Every effort to educate a popu-
lation of rough origins was hampered by bitter family
feuds. Measures for the repression of a fresh outbreak of
bushranpng during the ’sixties were impeded by the ease
with which a “gang” might use some secluded free selec-
tion, chosen perhaps to fit their purposes. Country juries,
mindful of the adage about glass houses, were almost as
willing to condone robbery under arms as stock-thieving.
The trial of the former offence was entrusted in New
South Wales to a special commission, juries being dispensed
with. When three notorious culprits, caught red-handed
after robbing a gold-escort at Eugowra of ^^28,000, were
condemned at a second trial, a petition for reprieve,
bearing 15,000 signatures, was presented to the Governor.
Bushranging by large gangs was prevalent throughout
the decade. Perhaps highway robbery was inevitable in
those days before railways, when even telegraph lines
were scarce and portable wealth might be had by resolute
ruffians for the taking. But free selection before survey
made the tasks of the police and the schoolmasters uphill
and dangerous work.

How came it that, in the face of its legal and social
perversion, Robertson’s Act remained virtually unamended
until 1884? Chiefly because it won the support of two
classes that were beneficiaries by the Act’s provisions, and
ignored the scattering of the colony’s great endowment.
To the genuine land-seeker, coveting with narrow intensity
a concrete spot that was all Australia to him, what was it
that posterity would suffer? He would provide for his own
by free selection. A more subtle but equally unworthy
resistance to an economical reform of the law came from
the pastoralists and the financiers. “The squatters were
content to let matters remain as they were, relying upon
their superior command of money, and ability to meet
fraud by fraud, to defeat the free selector, who menaced
their runs.” More cynical still was the acquiescence of
political leaders in a scheme that had admittedly failed

14.

210 “UNLOCKING THE LAND” IN

and was manifestly sowing seeds of social and financial
trouble. In the administration of the Act the decision of
many a critical question — whether land should be put up
for auction, and in what parcels, whether a selector should
have his chosen spot — put great power into the hands of
Ministers of the Grown and their associates. The legislators
had good reason to cling to this patronage. “ It is notorious
that the most effective mode of getting business done at
‘ the Lands ’ whether in terms of the law or with the view
of thwarting its operation, is to select a land agent who
is a member of the popular branch of the Legislature.”^
Finally, the ease with which the proceeds of land sales
financed the public expenditure had its effect. It bought
the acquiescence of the general taxpayer.

The system, as worked out under ministerial interpreta-
tion, gave the pastoralists the freehold of their runs, but
at a heavy They were not philanthropists in paying
enormous sums into the Treasury. They would much have
preferred definite leases at reasonably appraised rentals,
for who would pay a pound an acre for land and load
himself with an annual interest charge of is. to is. 6rf., if
he might have the use of the grass for ^d. an acre? The
pastoralists borrowed heavily from the banks in buying
the freehold, and thus fell into debt to escape a law-made
insecurity. As a result they were tempted to overstock in
order to lift the mortgages on their land, and in the
’nineties, when the wool-market was glutted and there were
droughts of unheard-of duration, many a big sheep-owner
was ruined.

Possibly of deeper significance in the end will be the
damage done to the Australian communities by the injury
the long feud inflicted on the political standing of the
pastoralists. Till well into the ’sixties they dominated most
of the legislative chambers in Australia and continued

^ N,S.W.i V. and P, 1883, vol. ii, p. 109, Cf. p. 124 for an instance in which
the official machinery virtually invited perjury on the part of applicants
and stultified integrity on the part of the official surveyors.

NEW SOUTH WALES 211

to dominate those of the outer colonies until the ’nineties.
In 1883 the Commission on the Land Laws in New South
Wales gravely noted: ‘Tt is argued that practices cannot
be condemned as illegal and immoral in which persons
of fortune, position and influence in the community have
been largely concerned”.^ It is not so argued now. The
position and influence of the pastoralists have suffered
owing to the shifts by which, albeit in self-defence, their
foremost men in the mother colony used the law to defeat
the cause of agricultural and family settlement. As persons
of fortune they have succeeded. But parliamentary
candidates from their ranks, however high their personal
qualifications, have been handicapped ever since by the
general knowledge that, in the leading pastoral colony,
their class used the forms of law to overreach public
policy. There are few representatives in Australian politics
to-day of the most characteristic and economically im-
portant Australians, the big sheep men; and their
absence goes far to explain the persistence with which
the politics of ‘‘development” ignore the economic facts
of environment and overseas marketing. Perhaps this is
Australia’s “tragic flaw”.

^ JV.S.IV., V, and P. 1883, vol. n, p. 91.

14-2

CHAPTER XIII

O O

Agricultural Settlement in the
Southern Colonies

The attractions of gold-digging and gold-mining
had raised the population of Victoria from 75,000
in 1850 to 538,000 in i860, and a provincial journal
in the latter year rejoiced that the dwellers in the interior
far outnumbered “the once predominant citizens of the
metropolis”. As gold-digging failed them, it was natural
that the new-eomers, despising the pre-gold “colony of
slaves and task-masters”, should seek to supply the lack
of “a prosperous and well-principled middle class” by
unlocking the land. Virgin and fertile plains stretched
north and south on either side of the auriferous highlands
they had peopled. City merchants, the press, and the more
public-spirited of the squatters alike advocated this obvious
policy of settling the diggers in an industry which would
win annual and increasing wealth. Yet, being in possession
of such pastures as the new volcanic soils of the western
districts and the alluvial valleys of the Wimmera, the
Lodden, the Goulburn and the Campaspe, the squatters
were but human in striving to postpone the change.

Forty million acres of the best sheep-walks in Australia
were a rich endowment for defensive action, and the law’s
tradition of maintaining subjects’ rights even against the
Crown led the courts to construe the Orders in Council
of 1847 in a sense favourable to those in possession. There
was no back country in Victoria, like the mulga lands
beyond the Darling or in Central Queensland, to which
the pastorahst alone might retreat. The eleven million

AGRICULTURAL SETTLEMENT

213

acres of mallee lands in the north-west were to them what
they had seemed to Major Mitchell— “ one of the most
barren regions in the world”. The squatters held their
ground and the symptoms of a violent explosion appeared.

In 1857 a self-constituted Land Convention assembled
almost opposite Melbourne Parliament House. The
leader was an Irish-American lawyer, Wilson Gray;
and the Convention made no secret of its intention to
force free-selection upon the legislature. Their slogan was
“a vote, a rifle and a farm”, and when the first of these
had been conceded they broke into the popularly elected
Assembly when it was debating a new Land Bill. The Age
assured the public that broken windows, bloodshed and
charges by mounted police wore more than the Eastern
Markets demagogues had intended. The “ popular oracles ”,
it explained, had, in their desire to show the earnestness
of the people, “overdone the demonstration”.^ But the
revulsion of feeling occasioned by this violence favoured
a compromise, and after a conference between the Houses
Nicholson’s Land Act of i860 conceded selection after
survey and credit payments.

The terms of the concession to land-seekers, being under
equal democratic laws necessarily open to all, proved most
favourable to those in command of money and local know-
ledge. When the Act was passed nearly four million acres
of the best Victorian land had already been sold by
auction. Well posted in these strongholds, the pastoralists
were able to pay for the areas now offered, up to 640 acres
in a block, prices which they were not worth as separate
holdings. And if more than one selector applied for the
same allotment it was put up for a sale by auction at
which only the applicants could bid. The scales were
weighted still further against the “small man” by the rule
that half the minimum purchase price of a pound an acre
must be paid at once. Most of the 800,000 acres alienated
in the space of eighteen months under Nicholson’s Act
^ The Age, 29 August i860.

214 AGRICULTURAL SETTLEMENT IN

were in the western district and around the central gold-
fields. Cultivation increased, but not by equal steps.
Selling out to a wealthy neighbour offered the selector a
better profit.^

In 1862, Charles Gavan-Duffy tried to prevent com-
petition between squatters and farmers by setting aside
“agricultural areas” for selection. When there were several
applicants for any of the 640-acre holdings into which
these were divided, priority was to be determined by lot.
But Duffy’s safeguards to secure the agricultural use of the
land proved ineffective. The Act gave the selector his
title, subject to the condition that he erected a boundary
fence or a habitable dwelling or cultivated one acre out
of every ten. The price, still a pound an acre, might be
paid by instalments of half-a-crown. But it was found
that, in the event of the selector selling his holding, the
Crown had rio^ower to punish his assigns for' failure to
fulfil the condition. Anyone might take up a fresh selec-
tion each year. By deputy and dummy the squatters
bought up the lands resumed. Within one week 800,000
more of the richest acres in the colony had been sold.
Before the operation of the Act was suspended by a new
Ministry it was computed that a hundred men had ob-
tained 930,000 acres out of 1,423,000 acres that had been
alienated in accordance with its provisions. “The very
class for whom he legislated”, its author complained,
“sold its inheritance for some paltry bribe”.*

Duffy’s Act, in effect, completed the transfer of Australia
Felix in fee simple to the pastoralists. Save for a compact
settlement raising pigs and potatoes around Tower Hill
(Port Fairy) and Warrnambool, on basalt soils deriving

^ Brooke, the Commissioner of Lands, attempted the issue of occupation
licences to small agriculturalists, on the analogy of pastoral licences, but
these were declared illegal by the Supreme Court.

* Quick, LL.D., History of Land Tenure in the Colony of Victoria,

1883: “The prodigality of the State in parting so extravagantly and in-
cautiously with the common inheritance has been only surpassed by the
profligacy and the ingratitude of those who were the objects of the paternal
care and anxiety of Parliament”.

THE SOUTHERN COLONIES

215

from the last but long extinct Australian volcano, the
Western District remained for another generation a famous
sheep country and no more. The farmers, like the railways,
went beyond its fertile stretches to the seemingly less
favoured grey and red Wimmera soils, or crossed the
Divide into the oft-flooded Goulburn Valley, or carved
out clearings from the giant forests of Gippsland.

The resistance of the pastoralists did not dispel the land
hunger. Where Duffy failed a versatile Scot succeeded.
James Macpherson Grant, a Sydney barrister who had
turned digger and had successfully defended the Eureka
stockade leaders without fee, was Commissioner of Crown
lands in the first McCulloch Ministry. He continued the
policy of selection after survey, but added by an Act of 1865
the simple rule that bona fide settlement must precede
alienation. His Act gave the selector only a lease at first,
though this was convertible into freehold on easy terms
of payment after three years of residence and the making
of substantial improvements. Three million acres had been
taken up under the new Act, and the area under cultivation
had increased from 416,000 acres to 680,000 when parlia-
ment felt encouraged to enact free selection before survey
under a similar safeguard. Under Casey’s Act, as the 1869
measure was called, another 1 1,000,000 acres were selected
in the Wimmera, the Goulburn Valley and Gippsland.
In the Echuca district dummying came to light, but it was
checked by a special land board. The Commissioner for
Crown lands held in reserve a discretionary power to
disallow applications, but this was seldom needed. The
three years’ probationary lease was effective.

Genuine agricultural settlement of the Crown lands was
thus made easy; yet it was impracticable to change by
such legislation the relative attractions of stock-raising and
arable farming. The area under crop in Victoria grew
from 410,406 acres in 1861 to 1,548,809 acres in 1880,
but the expansion was considerably greater on new selec-
tions than in the colony as a whole. The ease with which

2i6 agricultural SETTLEMENT IN

virgin land might be obtained tempted men to crop their
land until it was exhausted, and then to sell out and take
up another selection. This was not mere greed. Those who
attempted to husband their land’s fertility by a rotation
of crops and fallow could not escape a soil-exhaustion
which made wheat-growing on old land unprofitable.
Either the farmer turned pastoralist after buying out his
neighbours to provide room for stock, or sold out himself
to an older pastoralist, and moved on in semi-nomadic
fashion to fresh wheat fields. By the middle ’eighties
Victoria’s agricultural progress had lost momentum. The
area under crop grew slowly from 1,500,000 acres in 1880
to just over 2,000,000 in 1890, while that under wheat
was stagnant at i,i 00,000 from 1883 to 1890.

Nor did Victoria escape the bushranging revival. The
wild tumble of mountains and river-valleys in the north-
east of Victofia7opened to selection under the later Acts,
had retained since the digging days a name for lawlessness.
In 1878 a gang of bushrangers, famous in Australia as the
last of the outlaws, and the heroes of a dramatic ‘‘last
stand”, issued from this region. Sons of John Kelly, a
convict who was sent out to Van Diemen’s Land in 1841
for attempting to shoot his landlord in County Tipperary,
Ned, Jim and Dan Kelly had gone with their mother in
1865 from Wallan to Eleven Mile Creek, near Glenrowan.
There they were soon plying the family trade as stock-
thieves. Ned was arrested as an accomplice of Power, a
New South Wales bushranger, but identification failed.
Some say he betrayed Power, but a Victorian police
Superintendent, named Hare, stoutly denies this charge.^
Jim, his younger brother, was “doing time” in New South
Wales — a ten years’ sentence, and his second — when both
Dan and Ned got into trouble again with the Victorian
police. There had been “bad blood” between them and
the troopers, one of whom had made love to their sister
Kate, and in April 1878, Dan, a boy of only seventeen,

^ In his Last of the Bushrangers (1892).

THE SOUTHERN COLONIES

217

was ‘‘wanted” on several charges of horse-stealing. Ned
aided his brother’s escape by shooting Constable Fitz-
patrick in the arm when he came to the Kelly home to
arrest him. Then with two young companions, Steve Hart
(18) and Joe Byrne (21), natives of the district, the Kellys
took to the ranges that lie between Wangaratta, Euroa,
Mansfield and Beechworth — a region well-watered all the
year round, snow-clad on the heights in winter, seamed by
rough ridges and pitted with wooded gullies where the
gang might rely on their own or their friends’ bushcraft
to evade all search. In such country stock- thieves had
long been expert at “planting” their captures, blotting
brands and assembling mobs for sale on whichever side
of the border suited their purpose. Drovers gave the
ranges a wide berth, for any youngster they met might
be a scout or “bush-telegraph” to the Kellys, Quins or
other marauders.

In October 1878 a party of four police sent from Mans-
field to the Wombat Hills was surprised by the four bush-
rangers. Its leader Sergeant Kennedy and another trooper
were shot dead and a third was wounded. The Victorian
ministry declared the gang outlaws and put a reward of a
thousand pounds on the head of each. But the countryside
stood neutral. The Kellys never wronged a woman or a
poor man. The feud was between them and the police.

In December they sprang on Euroa, within a hundred
miles of Melbourne, “stuck up” Younghusband’s station
three miles out, then the National Bank in the township.
There they took ^£2200 in cash, locked the banker and the
station folk in the station store and made off successfully
to the bush. In February they appeared at Jerilderie in
the central Riverina, by way of answer to New South
Wales’ derision of the Victorian police. Ned roused the
Jerilderie police at midnight with an alarm of murder.
They came out unarmed and were put in their own lock-up,
after doffing their uniforms. Dressed in these the Kellys had
their horses shod by the police farrier, giving themselves out

2i8 agricultural SETTLEMENT IN

to be ‘‘relieving the constables”. They then “relieved”
the Bank of New South Wales of ^(^2140, and used the
Royal Hotel as a temporary prison where Ned Kelly
locked up the townsfolk and in a curt speech bade them
stay where they were until the gang got well away. The
New South Wales Government put another thousand
pounds reward on each outlaw’s head.

For more than a year after the gang remained in
hiding. Every effort of the police, even with black trackers
from Queensland, proved futile. On 27 June 1880, how-
ever, near Glenrowan, they called Aaron Sherrit to his
own door. He was an ally who had agreed with the police
to betray them, and they shot him as he came out. The
outlaws then galloped to Glenrowan. There they placed
sixty people in the hotel, many of whom were sympath-
izers, tore up the rails of the main North-Eastern line on a
dangerous enlbShkment nearby, and proceeded to loot the
town. But, unknown to them, a lame schoolmaster called
Curnow had got away, stopped the train and notified
the police down the line. At dusk on the 28th the police
closed round the township. At dawn Ned Kelly was still
firing into the police from outside the ring, but he was
wounded in the foot and unable, perhaps unwilling, to
escape. Several shots palpably hit him but failed to do
him hurt. At last another in the legs brought him down.
He was heavily encased in helmet and breastplate ham-
mered out from the mould-boards of ploughs. Later in
the day the hotel was burned to the ground over the dead
bodies of Dan Kelly, Byrne and Hart.

They were mere boys, “wild colonials ” who had had little
chance of knowing better, and the setting of their death,
trapped as they were by their life-long enemies, the police, in
the presence of their neighbours and kin, scalds the heart.
At Melbourne a meeting of five thousand, passionately
harangued by an ex-Minister of the Crown, urged the
Government by unanimous resolution to spare Ned Kelly
from the extreme penalty of the law. Nevertheless it was

THE SOUTHERN COLONIES 219

fit and historically apt that a schoolmaster, though he
limped to do it, rid the colony of a pest which was a
reminder of a dark age. No amount of sentiment can
disguise its sordid and criminal features.

South Australia started with better human material
and her economic development was least warped by
transportation and gold-rushes. After half-heartedly at-
tempting to open the puzzling Murray mouth and to play
a commercial role in serving the Murray-Darling basin by
river transport,^ the province found prosperity by means of
the agricultural resources of her central rift-valley and of
the folded hills of rich alluvium beside it.

Isolation and the different quality of her colonists
might have made her an Australian and nonconformist
South Island. Yet even in South Australia, a land without
precious metals of her own, the backwash of the mining
rushes forced on the conflict between pastoral and agri-
cultural use of the soil and brought industrial ambitions
and standards out of intercolonial rivalry. In the ’fifties
the exodus of her adventurous sons to ‘‘the fields” caused
the thorough use of Ridley’s “stripper” in harvesting the
wheat crop. The ’sixties saw a rapid extension of stock-
raising and agriculture to meet the goldfields’ demands,
and an exodus of disappointed or would-be farmers to
select land under the radical laws of New South Wales
and Victoria. Thereupon the province overhauled her land
system and for a time her legislators copied, with a certain
caution, experiments in the art of colonization which once
they had been proud to teach.

Even after the discovery in i86o~6i of the rich Wallaroo
and Moonta copper deposits, agriculture produced crops
that in normal years rivalled in value the products of the
mining and pastoral industries combined. Little farms
continued to multiply and spread. From 1862 to 1880 the

^ These attempts are admirably reviewed in A. Grenfell Price’s “South
Australian Efforts to Control the Murray”, A.A,A,S., Perth Transactions,
1926, pp. 444 et seq.

220 AGRICULTURAL SETTLEMENT IN

area under wheat in South Australia and the wheat-harvest
were about equal to those of all the other colonies put
together. After 1866 wheat was exported in fluctuating
but considerable quantities to Britain. By 1881 the cultiva-
tion per head in South Australia was 7*5 acres as com-
pared with 1*7 per head in Victoria and four-fifths of an
acre per head in New South Wales. The Mediterranean
climate of South Australia is far better suited for wheat-
growing than the coastal lands then favoured by farmers
in Victoria and New South Wales. ^ But in turning that
advantage to good use the intelligence of South Australian
farmers evolved a labour-saving technique. Until the
late ’sixties the ripe crops were gathered with reaping hooks
in the slow-ripening fields of the S.E. coasts, and the hay
was mown with scythes. The sheaves carted in at ‘‘harvest
home” were stacked and laboriously threshed with the
flail and the grafti was winnowed with sieves on windy days.
Ridley’s “stripper”, a header pushed at first by two horses,
did its work best in a dry crisp air, such as lasted in South
Australia’s harvest-time from dewless dawn to dark. This
was but the first, though it was the most decisive, of the
inventions by which the farmers of that province left
vacant the places deserted by those who rushed to the
gold-diggings, yet increased production and lowered their
costs. Victorians adopted the stripper after a bumper
harvest in 1866-7. An average wheat yield of 22-25
bushels tempted the reapers to demand forty shillings an
acre to cut the crop. After that the strippers were in
great demand. Not only did they cut the crops on the old
wheat-growing areas more cheaply than such hard-bar-
gaining fellows, but, what was more important for Victoria’s
future, they encouraged selectors under Grant’s Act to
venture inland to districts like the Wimmera where the
summers were like those of South Australia. With the
strippers the grain could be taken off quickly before the
north wind’s mighty flail had threshed it for the birds.

1 See map facing p. 252 in S. H. Roberts* History of Australian Land Settlement,

THE SOUTHERN COLONIES aai

One invention suggested another in a community whose
best minds were as yet undistracted from the main issue
of producing more wheat and wool. After strippers came
into use in South Australia, a new method was devised of
clearing the scrublands thrown open to selectors in 1869.
Prior to this only those who had other land for cropping
could afford the five years needed to break in scrub or mallee
land. The method adopted had been to cut the scrub at
about a foot above ground, to pile the debris around the
stumps and burn soon after the new shoots appeared.
“Sucker-bashing” — a very arduous business with the
mattock — was still needed after this and raised the cost of
killing the scrub to fifteen shillings an acre. But the cleared
land grew good grass. Those who had sheep could get some
return for their expenditure even during the five years before
the roots were ready to be drawn from the ground. These,
if a market offered, were sold as firewood for the towns.

A settler named Mullens at Wasleys (S.A.) made farms of
nothing but scrubland both practicable and profitable. He
cut the scrub level with the ground, burnt it off and then
scratched the soil with a heavy triangular log through
which he had driven strong spikes. From soil enriched
by the ashes of a “good burn” this “scratching in”^ would
produce a few crops that showed a good margin of profit
above the light costs involved. But such farms in the South
Australian mallee needed constant attention with the
“fire-rake” to keep down the regrowth of suckers. Other
scrubland selectors, of whom R. B. Smith of Ardrossan
(Yorke’s Peninsula) was probably first, went one better
and contrived a plough that thoroughly turned up this
“Mullenized” land and incidentally loosened many of the
roots. Its two, three or more shares worked independently,
and each, as it struck an ungrubbed stump, tripped, passed
above it “at the trail”, and was sent back into the soil

^ It is customary to explain the term “cockey farmer’* by the analogy
between this scratching in and the cockatoo’s habits. More probably the
phrase is a corruption of “cockney farmer”. See reference to Hobler Papers^
p. 93, note 2, supra.

5222 AGRICULTURAL SETTLEMENT IN

by a strong spring so soon as the stump was jumped.
After such multiple-furrow stump-jump” ploughs came
lighter cultivators, seed-drills and complete harvesters, the
most successful form of which was the work of a young
Victorian farmer, H. V. McKay in 1884. More than one
South Australian claimed to have anticipated McKay in
making a complete harvester, capable of stripping and
winnowing in one operation. Whoever was the inventor,
there ^is no question of the important part in maintaining
net profits that ‘‘harvesters” have played. With such a
machine the farmer may, single-handed, drive his team
into the ripe crop and, while daylight and endurance last,
pour the wheat into the jute corn-sacks ready for sewing
up and delivery at the mill or the railway siding.^

After 1876 such aids were badly needed by South
Australian farmers. From that year to 1904 not one crop
reached a ten-bjishel average, eighteen fell below a six-
bushel average, and prices ruled low. Nine of the poor
harvests were reaped in succession, from 1894 to 1902
inclusive. That was a spell of prolonged drought, but not
all the years from 1876 to 1904 were drought years. Soil-
exhaustion far and wide was mocking the farmers long
before the Big Drought set in.

From the first. South Australia had conceded them effec-
tive rights to displace squatters from their leases of Crown
land. As a consequence the farmers enjoyed a reasonable
freedom to test their relative ability in turning the province’s
sun-baked soil to good use. No suggestion of security of
tenure was granted to Crown lessees until after 1847. Then
under the Orders in Council they obtained “permissive
leases” up to 14 years in duration, outside the “hundreds”
surveyed for agriculture and sale. These did not prevent
resumptions. A favourite means of raising revenue con-
tinued to be “killing a squatter”, i.e. giving a Crown
lessee six months’ notice and then surveying his run into

^ For a description of the mechanism of H. V. McKay’s Sunshine
Harvester, see the Australian Encyclopaedia^ vol. n, p. 664.

THE SOUTHERN COLONIES 223

hundreds. Despite this slight security, the goldfields market
and the northern explorations of Stuart and McKinlay
had led during the ’fifties to a fourfold increase of stations
shipping from Port Augusta at the head of Spencer Gulf.
Goyder, the Surveyor-General, reappraised these northern
runs after a series of good seasons, but immediately after
his doing so most of them were abandoned. A pitiless
drought left them bare from 1864 to 1869. After the
drought, Crown rentals, based on stock actually carried,
replaced the double impost of fixed charge plus assessment
on official estimates of “capacity”. But what made re-
stocking practicable after the drought was not the easier
rentals so much as the fences, wells and dams which took
the place of the sod-huts and movable hurdles of shepherd-
ing days.

By 1872 the expensive yet economical ways of capitalism
had universally replaced the nomadic patriarchal style.
Capitalism, being expensive, called for some security of
tenure. This came through the operation of radical land-
laws.

In the south of the province sale by auction of Crown
lands withdrawn from pastoral occupation did not satisfy
the farmers’ land-hunger after the ’sixties. Land-agents —
some called them “land-sharks” — divided the spoil at or
near the upset figure of a pound an acre. They deterred
genuine land-seekers by threatening to bid against them for
the particular block they sought. For this reason, to quote
Stephen Roberts, “the trek of the covered waggons of the
German settlers was a common sight in the late ’sixties,
and a continual stream slowly wound across the plains
towards Albury and the easily acquired land”. Such
sights were a scandal in the chosen home of systematic
colonization and many were the proposals and investiga-
tions for a remedy. In November 1865 the Surveyor-
General went north to mark where the rainfall had ex-
tended, even during drought. He found the “line of
demarcation extending considerably further south” than

224 AGRICULTURAL SETTLEMENT IN

he had anticipated and traced it from Swan Reach through
Burra Hill, Oak Rises, Mount Sly, Mount Remarkable
and Broughton across the gulf to Franklin Harbour and
N.W. to the west end of Gawler Ranges. As a result of
Goyder’s investigations the stock runs were re-graded
into four classes,^ and his work was naturally given
prominence as an historical generalization upon the
incidence of drought. Botanists think Goyder based his
judgment on the prevalence of perennial and other salt-
bush and of mallee. But such was his prestige at the time,
as a permanent official well endowed with both knowledge
and pluck, that “Goyder’s Line” was almost immediately
accepted as marking the “safe country ” for wheat farming. ^

In 1869, Goyder reported on the working of Grant’s Act
in Victoria, and in that year Henry Strangways, an English
barrister who had quickly taken the lead in South Aus-
tralian politics, ^rried a measure similarly designed. It
maintained auction sales of land for the sake of “revenue”,
but permitted deferred payments while restricting the
transfer of blocks sold on credit. Selection was allowed
only after survey and within defined agricultural areas.
As usual, selection tempted men into dummying, especially
in the competition for rich pockets of land round Mount
Gambier in the south-east. Conditional purchase after
survey was extended by a Waste Lands Act of 1872 to the
whole area inside “Goyder’s Line”. Some farms beyond
this line had been under cultivation, however, as early as
1867, and after 1874 there was increased activity in taking
up areas oflfered for selection in the far north, i.e. north

^ S.A., V. and P. nos. 62 and 78 of 1865-6, no. 133 of 1865-6, 16 February
1866.

* T. G. Taylor, Australian Environment, 1918, p. 98, praises Goyder*s work
as a model in estimating the possibilities of new country. It was essentially
a brilliant surmize but its definite nature has been overstated. His maps
and journeys show evidence of indecision and he made minor alterations
subsequently. It does not coincide with the 14 inch, the 12 inch or any
line of rainfall, and follows the salt-bush closely only near the Burra. Wheat-
farming with modern methods has gone far beyond it and the modern
geographer hesitates to mark “The Line” on his maps for fear of reviving
the deterrent power it once had.

THE SOUTHERN COLONIES

225

of Port Augusta. Good seasons flattered the venturesome
and many were ready to argue that rain followed the plough.

The outward surge of agriculture was met by a shift of
wool-growers to the south. When the policy of resumption
was active, banks were chary of advancing money to Crown
lessees for expensive improvements ; and all the pastoral
leases were to be put up for auction in 1888, not a distant
date in risky country where repayments are often delayed
by ‘‘act of God”.

To make insecurity worse, rabbits came in waves down
the Murray valley and over the interior, and in the
’eighties drought returned. Soon it was seen that “good
stations had been ruined to make bad farms”. The plough
had out-paced the rain-clouds and there was nothing for
the northern farmers but to abandon their bare, wind-
swept fields and “toe the Line” once more. For some of
them benevolent governments found southern holdings in
exchange. Payment of interest on purchase money was
remitted and payment of principal postponed. In areas
thought doubtful for farming some were induced to stay
by renewable leases in lieu of purchase. Representative
boards were created to adjust rentals and renew the
pastoral leases, to keep watch against dummying and to
classify land so that selectors’ obligations might vary with
the productive power of their land.

Under flexible administration by these standing boards,
the Acts of 1869 and 1872 grafted conditional purchase
after survey on to the Wakefield system, as a corrective
to the vice of speculation that had beset it. The primary
aim was still agriculture, in a moving equilibrium with
pasture. Kindly, intelligent amendment maintained the
province’s name for progressive idealism in her land laws.
Yet neither parliament nor representative boards had it
within their power to amend the soil. Its exhaustion con-
tinued to make the cultivators restless. From 1880 until
well into the new century, about 1907, the total area under
the plough was stagnant at 2,200,000 acres, while that

S H

826 AGRICULTURAL SETTLEMENT IN

under wheat fell back from the 1,942,453 acres recorded
in 1884-5. The cause was evident. From an average of
11*2 bushels an acre from 1861 to 1865 the yield had
fallen to 5-43 bushels an acre for the years i88i to 1885.
Worse was to come during the great drought. For the
years 1896 to 1900 inclusive. South Australian farmers
harvested an average of 4-1 bushels to the acre. Well
mi^ht Sir William Crookes, in surveying the world’s wheat
resources, wonder why they persisted. By that time, how-
ever, hope had dawned. At Roseworthy Agricultural
College, founded in 1879, Professor Custance, the first
principal, put his finger on the weakness that was de-
pressing the yield — an exhaustion of the phosphates always
in short supply in Australian soils. He advocated as
remedy the dressing of the land with soluble superphos-
phate. For more than a decade the practical men smiled
at Custance .-^nd his successor. Professor Lowrie. Then
they gave “the handful of magic dust” a trial, and a new
era in the Australian economy began.

To face the double insecurity of drought and legislative
changes the pastoralists of South Australia relied on
another but equally rare type of insight, and succeeded
so well that they bought up many a baffled farmer’s free-
hold in the central area of the province. The sheep brought
by the first colonists were largely of Leicester and South-
down breed. Angas’s South Australian Company added
Merinos from Saxony, Mecklenberg, Tasmania and New
South Wales. These and the overlanders’ flocks of the
same breed throve at once, and South Australian sheep-
breeders evolved a special type of Merino which won the
province high fame for her weighty fleeces. Darwin held
that not one man in a thousand had the accuracy of eye
and judgment adequate to the breeder’s task. The flock-
masters of South AustraUa numbered several such breeders
amongst them, notably John Murray of Mount Crawford,
and early learned to follow their lead. Without bringing
in fresh blood, but simply by inbreeding and culling the

THE SOUTHERN COLONIES 227

unwanted variants, generation after generation, they fixed
a robust and vigorous type with a heavy fleece of long-
stapled fine wool, an animal, because of its lack of wrinkling,
least likely to suffer from the dreaded blow-fly. As a
rule. South Australian flockmasters eschewed ‘'artificial
feeding”, looking to the survival of the fittest chosen to
maintain the vigour of their stock and to adapt it even to
the chronic drought of the northern salt-bush country.

Tasmanian and Western Australian colonists strove
during the second half of the nineteenth century to rid
their communities of the economic stigmata of transporta-
tion. The Tasmanians had the more obvious need to do so.
In 1840 there were 27,246 convicts in the island as against
40,432 free, of whom only 13,000 were adults. Between
1841 and 1852 some 35,378 more convicts were sent
thither. Making all allowance for the eagerness of expirees
to quit the scene, the population of 68,870 in 1850 was
saturated with “lag” blood. ^ The road construction and
other pioneering tasks done by the prisoners were stultified
for decades by the handicap, largely but not wholly psycho-
logical, with which “the system” and its products weighed
down a little country by no means poor in natural resources.

In 1858 the new legislature thought to try the fashion-
able policy of unlocking the land as a corrective of the
inertia that had resulted from the exodus to Victoria. But
there was little good land left to be unlocked. East of a
line from South Cape to Surrey Hills three million acres
had already been sold, two million were under grazing
licences, and a million in guaranteed “quiet enjoyment”
for ten years. These were the “settled lands”. The wet
Western third of the island remained smothered under
almost impenetrable scrub. The new law retained auction
sales of Crown land and, as in New South Wales, there
^vas more alienation than agricultural settlement. In 1863

^ According to J. B. Brigden, Tasmania^ an Economic Sketch (1927), p. 14,
n the ten years 1851-1860 some 88,660 emigrants were replaced by 77,080
mmigrants, yet the population “had fallen in productive quality”.

i5*a

228 AGRICULTURAL SETTLEMENT IN

“agricultural areas” in the north-east were offered for
selection but succeeded little better. The offer bore witness
to a consciousness of one of Tasmania’s natural handicaps,
the scattered deposition of her assets. But the root cause
of the colony’s trouble was that, in wheat growing as in
wool, her resources were inferior to those of the main-
land, though her climate was attractive to colonists fresh
from England. Van Diemen’s Land had been exporting
wheat to the Sydney market before her settlers took up
wool under Governor Sorell’s guidance, and in 1850 she
had produced more than the mainland. But the transition
from gold-mining to agriculture in Victoria and the
superior advantages and energy of the South Australians
brought the price of wheat below the marginal costs of
production in Tasmania. The area under wheat began to
shrink in the ’sixties. Farmers in the island were victims of
soil-exhaustioj*even earlier than those in South Australia,
and their government provided no such technical instruction
as the Roseworthy College men gave their competitors. So
Tasmanian wheat was driven out of its natural market in
Victoria by South Australian and Californian competition.
Emigration continued. A quarter of the land revenue was
ear-marked after 1864 for roads and wharves, but as land
sold very slowly both revenue and public works fell away.
Even sheep-pasturing barely held its own. An attempt
was made to extend it into the rainy “unsettled lands”
towards the West Coast. Areas of from 60 to 640 acres
were offered as free rewards to any settlers who might
possess capital equal to a pound per acre acquired and
would use it to effect improvements.

To bait the hook, grazing leases of as much as 10,000
acres in adjacent mountainous country were added. On
these the grantees might expect at least to reimburse
clearing costs by felling timber and exporting it to the
builders of Victoria. But Tasmania’s luck held. In the
’sixties even that market slumped, for, once more, superior
resources were found north of the Straits.

THE SOUTHERN COLONIES

229

When. Victoria set up her tariff wall, Tasmanian de-
pression grew even deeper. Projects of reciprocity were
‘‘gravelled for lack of matter What had the island to
offer that David Syme should relent from his ideal of self-
sufficiency? A retaliatory tariff failed to put any pressure
on the wealthier and younger community. It extended
“the dull indigence of Hobart’’ to the northern half of
the island, which had hitherto extracted some prosperity
from trade with Melbourne. The expenses of govern-
ment, when severely pruned, were almost met in good
years by the sale of as much Crown land as buyers could
be induced to take, but the banks had little liking for
advances to enable their clients to buy land on which
fluke and scab were prevalent.

In 1871 came the first signs of change. As usual a man
named Smith turned the colonists’ attention to mining,
though in this instance he was reversing the process of
economic change on the mainland. The Tasmanian
Smith—James by name — returned from the diggings but
refused to settle down at farming. He earned the nick-
name of “the Philosopher”, apparently by his eccentric
persistence in searching for gold-bearing quartz. He found
tin in 1871 at Mount Bischoff in the north-west. Tin-
mining, though it seemed a tame thing after Victoria’s
gold, did something to revive enterprize, and in 1875
further deposits were found in the north-east. In the
year following, Hobart and Launceston were joined by
rail, and in 1877 gold was found at Beaconsfield near
the Tamar mouth. Finds of silver-lead and copper fol-
lowed in 1885-6 at Mount Zeehan and Mount Lyell on
the west coast where Tasman had first seen the land long
before. For the first time for many decades immigrants
came to swell the island population. Tillage increased
in the scattered valleys. Potatoes from the north-west
and apples in the Derwent and Huon Valleys were
added to the island’s tally of exports. Governments took
courage and launched into active loan expenditure on

230 AGRICULTURAL SETTLEMENT IN

transport facilities, railways, roads and bridges. The spell
over the island seemed to be broken at last.

In Western Australia, transportation, deliberately ac-
cepted, and triply safeguarded by the reform of the penal
code in Britain, by the exclusion of female prisoners and
by the employment of the men solely on public works, did
less harm, on balance, than anywhere else. The ‘'chronic
despondency’’ of the stagnant decades passed after 1870
wh^n a representative council was called to a wider vision
and solid achievements by Governor F. A. Weld^ and the
native-born explorer-statesman John Forrest. The pastoral
horizon widened when in that year grass-land was found
on the Hampton Tableland, and when in 1 874 splendid salt-
bush and mulga were found on the Murchison and Sandford
water-courses inland from Champion Bay. Governor Weld
had had experience in New Zealand both as settler and ad-
ministrator, aij^ dealt with the patchy character of the land
available for tillage, as South Australia was doing, by classi-
fying each area and varying the terms of selection with
the quality of the land. To squatters he offered the security
of fourteen-year leases with rights of pre-emption. In
1880 pastoral occupation followed Alexander Forrest’s
exploration of Fitzroy Plains in the far north. In 1885 a
railway reached York in the sweeter lands of the Avon
Valley beyond the Darling escarpment, and wheat farming
prospered there in a quiet way. It may have been only
by comparison with days of narrower things that the
colonists felt satisfied. To John Forrest, acting “comp-
troller of expenditure” after 1880 and surveyor-general
after 1883, free selection of small blocks for agriculture
meant nothing very grand. He bowed to the strong desire
for its retention, but thought “free selection had in many
places resulted in spoiling the country, having dotted over
it quite unimproved small locations securing water-holes,

^ For an able review of the state of the colony emphasizing the urgent
need of representative institutions as an expedient of political education
for a younger generation which had not felt responsibility, see F. A. Weld
to Earl Granville, i March 1 870.

THE SOUTHERN COLONIES 231

springs and small pieces of good land which it would have
been better for the colony never to have sold’’.^

To check such peacocking and to protect the pastoral
tenants from blackmail, Forrest adopted the usual devices
of liberal land-laws such as “agricultural areas’*, long
terms of sale on credit, the issue of titles only after a pro-
bationary lease and due improvement. Pasture alone made
headway as yet, but he had laid on sound lines his long
campaign in favour of agriculture. The sheep in the colony
passed the first million in 1879 two millions in 1888.

By then the whole atmosphere had changed. Gold was
found in 1883 the torrid East Kimberley, and, though
most who rushed thither in 1884-5 rushed back to Cam-
bridge Gulf in a thirst-stricken retreat, gold was won in
fair quantities. The sententious report in which E. Har-
graves, the New South Wales gold discoverer, had dis-
coursed on “the non-auriferous character of the rocks of
Western Australia” lost its authority and men found traces
of gold at widely scattered points from Albany to the
de Grey. All was excitement^; the Swan River awoke
from somnolence to an eager expectancy.

The general result of the period of land reform sur-
veyed in the preceding two chapters was disillusionment.
Unlocking the land had opened no door to unlimited gains
by farming. Neither the go-as-you-please policy of New
South Wales, nor the survey of agricultural areas in ad-
vance of settlement favoured in the other colonies, had
enabled the farmers to make much headway in displacing
the squatters. Save in South Australia, wool remained the
staple by virtue of the greater net returns it brought.
Even in South Australia, the norm of an unforced colonial

1 Surveyor-General’s Report for 1883, ^ Leg, Council V. and P. 1884,
no. 15.

^ The story goes that Colonel Angelo, the Government Resident at
Pilbara, when gold was found there, wired to the Colonial Secretary
(Malcolm Fraser): “Young Withnell picked up stone to throw at crow”
and omitted to report what Withnell found in it. Mr Fraser replied: “Did
he really? What happened to crow?”

232 AGRICULTURAL SETTLEMENT IN

economy, neither liberal land-laws, nor rich soil, nor both
together had been enough to assure settled prosperity to
the farmers. Only rare qualities of invention, tenacity and
insight had kept them from faltering and were to restore
their strength at the end of the century. In the ’seventies
and ’eighties, throughout the south-eastern colonies the
banks spread their branches into the squatting districts, the
station men bought their runs, fenced them, watered them
and^bred up their flocks. Certainly wheat was not yet
the master word. The Australian farmer had much beyond
politics to learn before his strength came upon him.

Graph of South Australian Wheat Farming, comparing the effort of the
province to develop this industry, as shown in the acreage cropped per
head, with the success achieved, as measured in bushels harvested per head.
The slump from 1875 1903 is very apparent.

The ineffectiveness of radical laws to promote the
farming interest at the expense of pasture might well

THE SOUTHERN COLONIES

233

have impressed on thoughtful observers the social meaning
of the price of land. Wakefield had had a glimmering of
that meaning when he advocated a ‘‘sufficient” price,
one that would impede all and sundry from becoming
“land poor” by taking up land they could not profitably
work. But he did not appreciate that in land values,
which are to keep the varying parcels of town and
country land in hands capable of putting them to the
best use, variation with changing circumstances is essential.
It may even be doubted if he saw that, apart from
changes in the market value of land-products, the
sufficiency of a price varied with the fertility and situa-
tion of the land. A price sufficient to put an end to
settlement at Australind and in Western Australia
generally was so low in South Australia as to invite the
speculative purchase and re-sale of metalliferous land at
the Burra and even of good wheat land on the Plains
and broad highland valleys. For political reasons the
price at which the government sold public land had to be
given a false uniformity. The government could not, with-
out an appearance of hard-bargaining, charge what the
traffic would bear. Yet democracy’s benevolent intention
to temper the wind to the farmer’s shorn lamb could
not endow the tender creature with the vigour that en-
abled the pastoral ram to survive and fatten. And it
came to pass that demagogues dispersed the public estate
and pastoralists gathered up the freehold thereof.

CHAPTER XIV

Plantation Slavery and Secession
for North Queensland

IN spite of some variation in their minor economic
activities, the Australian communities, festooned along
a coast-line of ten thousand miles, are nowadays
strangely uniform in social structure. In each port— there
are less than a score that count for much — you will find a
group of importers’ warehouses, some big wool-stores, a
railway terminus, a wharf-lumpers union and a number
of public housSfe tied to breweries. If there is a capital
city in the near background, it is inhabited largely
by a civil service concerned with Crown lands, public
works and education. Its environs will boast some in-
dustries engaged on the simpler manufactures or on the
repair and maintenance of the mechanism of land trans-
port. Ships, if they can, seek cheaper repairs elsewhere.
Dairying, grape-growing and its derivatives, sugar and
other tropical plantations may seem to flourish on the
coastal areas, but do so largely through Government aid.
Over the range is the scene of the peculiarly Australian
work, done by a scattered population of miners, farmers
and station-hands, who turn out staple raw-products on
a rough, grand scale with labour-saving machinery that
is the worthiest output of the town factories.

Brooding over the coastal capital, and browbeating with
their vociferous claims the mercantile and professional
classes who, but for fear of the “wowser” vote, would
mould the economic policies of the country on more
orthodox lines, stand the federated trade unions. Their

PLANTATION SLAVERY

235

Trades Hall is the scene of a fluctuating contest between
the capable leaders of three groups: (i) the shearers,
miners and timber workers of the bush, (ii) the town
artisans, and (iii) the transport workers and public works
employees. These contend for mastery, somewhat noisily
at times, through the primaries or ‘‘selection-ballots” that
name the labour candidates for the local or national
parliament. More continuously they learn the arts of
parliamentary debate and constitution-making in holding
or capturing the state party machine. The farmers, with
some aid from pastoralists and the middle class, are
learning political organization from the workers, but are
still clumsy and inarticulate. This social structure varies
little with the minor staples that differences in local
climate may add to the dominant wool and wheat. The
Australian communities have set in these forms with a
surprising uniformity. In the politics of each the drive
comes mainly from a hard-eyed, hard-headed, hard-
mouthed working democracy.

Queensland once promised to evolve quite a different
social tissue comparable to the planter-aristocracy of the
Old Dominion and the Carolinas in the days of Calhoun
and Henry Clay. Miss Flora Shaw (the late Lady Lugard),
stressing the contrast between temperate and tropical
Australia, at the Colonial Institute in 1894, predicted that
“if North Queensland obtains the political separation for
which it is agitating the nucleus of the development of
tropical Australia will have been formed. The creation
of other tropical colonies, in which the habits of thought,
the aims and traditions will differ widely from those of the
existing Australian communities, will be only a question
of time”. But Southern Queensland, with effective aid
from Whitehall at more than one juncture, offered so
determined a resistance to secession and social differentia-
tion that economic forces had time to assimilate the north
and to cut away the bases of the planters’ will to rule.

After the wild scramble for alluvial gold, the wool-

236 PLANTATION SLAVERY AND

growing industry resumed its sway as premier industry
throughout Australia and tightened its grip on the south-
eastern colonies under cover of the radical land laws. In
so doing it pressed into its service the bigger and better
resources of money and men that the golden age had
furnished. But its geographical centre had moved definitely
northward. Before the gold discoveries, the flocks of Port
Phillip District vied on almost even terms with those of a
Nev^ South Wales that still included Queensland. Twenty
years later the wheat-growers were restlessly disputing for
the land south of a line from Port Augusta in South Australia
to Mount Kosciusko. North of that line the superior power of
the pastoralist to make profitable use of the land grew more
marked as the winter rains gave place to the summer rains.
Queensland seemed to the pastoralists “their promised
land”. Leslies, Campbells and Archers showed the way,
and in the ’sixties scores of southern squatters sought safety
there from tfie^ree selector. Black spearsmen ambushed
their stock in the brigalow scrub. They besieged even
numerous station households in a strength and determina-
tion forgotten farther south, and murdered isolated shep-
herds and carters with tragic cunning. In Queensland
men went about their daily task with shot gun in hand, and
nightly folded their sheep because pastoral occupation was
still an invasion of territory held in force by resolute
enemies. But native resistance could not stop the invaders.
“The natural progress of the aboriginal race towards
extinction”^ soon made fences, boundary riders and the
“kelpie” feasible there too.

But climatically the north was less suitable for sheep than
were the western plains of New South Wales. The excessive
evaporation in summer more quickly turned a season of
light rainfall into complete drought. Good ‘ ‘ top-fe^d ’ ’ might
remain on saltbush, gidgea, leopard-wood and mulga and
in the dried Mitchell grass, but the drying of the rivers
and water-holes meant sweeping losses of sheep. Cattle

* Sir W. Denison to Sir E. B. Lytton, 6 April 1859.

SECESSION FOR NORTH QUEENSLAND 237

could travel farther to water, and therefore, as the * eighties
opened, the northern colony became the chief cattle area
of Australia. Deep bores tapped artesian supplies in that
decade and made sheep safe long after the evaporation
of surface-water. The increased carrying capacity of pad-
docks thus watered was marked by the growing numbers
of both sheep and cattle.^

Even with assured supplies of drinking water for man
and beast, Western Queensland remained a pastoral
domain, but on the Darling Downs round Toowoomba
there was one debatable land over the range where tillage
and cereal crops were also practicable. Just before and
after the grant of self-government in 1859, pastoralists and
speculators had rushed to lease the favoured areas, and
had taken up twenty-five million acres. To sort out opera-
tive from speculative squatters, the new legislature allowed
a fourteen years’ lease only to those who proved their runs
stocked during the first year of occupation. But the same
herd of cattle might '‘prove” many runs to the satis-
faction of the Government inspector. Though he might
know the herd by heart, how could he “give away” such
charming hosts? In any event, cancellations of lease
brought no new population, while squatting remained
“the only productive interest in the colony”. Governor
Bowen and Premier R. G. W. Herbert, the two ex-
secretaries to William Ewart Gladstone who launched
Queensland into responsible government, set out to pro-
mote agriculture wherever it should prove possible.

In addition to selection on easy terms after the survey
of chosen areas they made lavish use of land orders to
immigrants. These would buy eighteen pounds’ worth of
country Crown land on the immigrant’s arrival, and
another £12 worth two years later. The legislators still

^ Production Statistics Bulletin, no. 20, p. 210:

1876

Cattle 2,079,979

Sheep

7»3 15*074

1882

>, 4.324,807

12,042,893

1892

„ 6,591,416

21,708,310

238 PLANTATION SLAVERY AND

planned farms on an English scale. These orders might
be issued to anyone who paid an immigrant’s passage.
H. Jordan, an active agent sent to England in i86i,
found a firm of shipowners who were willing to bring
out immigrants by the thousand and to take payment in
land orders. Darling Downs pastoralists saw their chance
and stood ready to buy such orders in any quantity.
The plan suited everybody. It relieved the Government
of dii'ect cost in financing immigration. It gave the new
colonist, if he had paid his fare, most of his money back
on arrival. But few tried cultivating their blocks im-
mediately they landed. Even earlier than in New South
Wales the financial strength of the wool-growers exploited
the legislators’ wish to see little farms on the inland
downs. Land orders helped them to build up freehold
stations with surveyors’ agricultural blocks.

For a few ye^j^s this went unnoticed. Parliament and
ministers were engaged in buying and “trying on” the
outfit of separate existence — the task Governor Macquarie
and Governor Gawler had found so absorbing — a task,
indeed, which, since the Tower of Babel, has again and
again drawn rulers on into exhilaration and folly and
their subjects into discord and remorse. They were building,
in haste and on credit, the nineteenth century equivalent
of city walls. Self-government brought freedom to start
a “national debt”, and the energetic Herbert set himself
to replace the primitive bullock tracks of the squatters by
the macadamized roads, railways and public buildings of
a civilized community. He easily obtained from London
investors loans of ;^i23,ooo in 1862, of £joy,ooo in 1863,
and of £i,oig,ooo in 1864. He spent them almost as
rapidly. Immigrants came in shoals, adding 52,855 new-
comers to the population between 1861 and the end of
1865. High wages were waiting for all able-bodied men
as navvies on the railways, roads and bridges.

About the middle of 1865, however, the Union Bank, as
the Government’s financial agents, received word that the

SECESSION FOR NORTH Q,UEENSLAND 239

colony’s debentures had become a drug on the London
market. It was only a temporary phase, men said. The
bank continued to advance money on the security of the
unsold debentures, at the usual ten per cent, discount.
But the cold fit in London persisted. For some decades
British investors had been losing capital in States of the
American Union now prostrate in defeat, in South
American republics and in Spain, Egypt and Turkey.
They recognized the fever of over-borrowing.^

The inexperienced ministers at Brisbane plunged on.
Herbert, intending to return to Oxford, had handed the
reins to Arthur Macalister, his Minister for Lands and
Works, but in May 1866 he drew his successor’s attention to
the need of a new loan to replenish the Treasury. Within
a week an Act authorizing an issue of £i,i']o,ooo de-
bentures had passed both houses and received the vice-
regal assent. The Union Bank demurred at further
advances, but the Sydney agents for the Agra and Master-
man’s Bank accepted the business of discounting and
placing the new debentures. Early in July, however, word
came that the Agra and Masterman’s Bank had failed, and
that Peto, Brassey and Betts, who were engaged on large
railway contracts in the colony, were in difficulties. It was
the Overend Gurney smash in London. Chaos and unem-
ployment fell upon the colony in a day. Without a word
of warning the Union Bank refused to cash the Govern-
ment cheques. Macalister proposed an issue of incon-
vertible legal-tender notes and short-dated Treasury hills.
Sir George Bowen made public announcement that he
must refuse his vice-regal assent to any such expedient.
Macalister resigned. Herbert, resuming charge as minister
without portfolio, rushed a bill through Parliament for
an issue of ,(1300,000 in ten per cent. Treasury bonds for
two years. He was assaulted in the streets by a mob
resentful of the Governor’s high hand, and resigned after
eighteen days, undefeated himself but discredited by the
1 See Leland Jenks, The Migration of British Capital to 1875

240 PLANTATION SLAVERY AND

defeat at a ministerial by-election of his intended suc-
cessor, Attorney-General Pring. The Bank of Queensland
failed. Bankruptcy spread wide among companies and
pastoralists. A coalition under Macalister, despite Governor
Bowen’s resistance, introduced an issue of Treasury notes,
though on a small scale. August brought an ugly situation
when hundreds of immigrants swelled the workless mobs.
Railway navvies thrown out of work at Helidon and
Ipswich marched on Brisbane to exact relief. Their first
attempt was stopped, but another in September threw
Brisbane into panic. Police and unemployed clashed in
the streets. Relief works absorbed some, but hundreds left
the colony and depression was universal.

Then in September 1867 James Nash found gold at
Gympie in Wide Bay District. Diggers threw up selections
and wages jobs in the south and poured thither. A liberal
Land Act was $^med (1868) to meet the difficulties shown
up by Herbert’s Acts and to retain the diggers as settlers.
It offered large areas, up to 7680 acres of second class land,
to grazing farmers who were to cultivate as well as to
stock their holdings. This via media, though long quoted
in the southern colonies as a statesmanlike reconciliation
of interests, brought the usual dummying. The land was
found by giving pastoralists ten years’ extension of lease and
substantial pre-emptive rights in return for the surrender
of half their holdings. By 1874 some 9000 selections had
been made and 3,000,000 acres alienated, but half of these
had been obtained by 267 persons of whom all but 90 were
squatters’ agents. They had surrendered leaseholds to buy
them back as freehold. There was considerable selection of
grazing farms, especially in the Lower Burnett and Wide
Bay Districts. Up on the Darling Downs, a liberal
Douglas Ministry tried free selection when the pastoral
leases expired in 1878. The new Act (1876) distinguished
between (i) conditional purchasers or grazing farmers who
could buy from 640 to 2560 acres at auction at an upset price
of lOJ. an acre, and (ii) agricultural homesteaders who

SECESSION FOR NORTH QUEENSLAND 241

could get their 80 to 160 acres at half-a-crown an acre.
But bad seasons intervened. Stations were resumed for
selection but while the drought lasted no one would buy.
Railways and better seasons brought some settlers along
the lines. Brisbane and Toowoomba were joined by rail
in 1875, and this made the sale of farm produce more
profitable. By 1884, however, it was clear that on the
inland downs alienation had far outrun the spread of
cultivation.

The coastal strip, a thousand miles long, is another
country. The S.E. trade winds bring rain to it off the
Pacific in any month of the year, usually in abundance.
At its extreme southern end is the seat of government, and
on the frequent patches of rich alluvial soil thereabouts men
soon found that sugar-cane grew well. Thomas Scott had
“tried it out” on a commercial scale at Port Macquarie
in New South Wales as long ago as 1823, damage
by frost sent its later advocates to the Northern Rivers
and Moreton Bay. In 1843, James Backhouse, a mission-
ary, found it growing as hedges between the beds in
the “Commandant’s Garden” near Government House,
Brisbane. In 1856, John Dunmore Lang, always an eager
advocate of the production of cotton and sugar by European
labour, rode out from Grafton to a creek on the Clarence
River where he saw 350 acres under cane, grown by a
settler from Mauritius, M. Adam. He thought it very
superior, yielding four tons of sugar to the acre. In July
1862 a correspondent of Lang’s at Moreton Bay waxed
enthusiastic over plots in the Botanic Gardens and told
of “sets” of cane distributed to cultivators in all parts of
the colony John Buhot had already made sugar on a
commercial scale at Brisbane. Among the pioneer planters
was the Hon. Louis Hope, a cadet of the Hopetoun family.
In 1862 he left a sheep station at Kilcoy on the Upper
Brisbane to grow sugar near Cleveland. With infinite
labour he cleared, enclosed, broke up and cultivated
twenty acres of forest and scrub. Having planted, trimmed.

242 PLANTATION SLAVERY AND

cut and carried the cane, he watched its crushing in a mill
of his own erection. Next he set up boiling vats, and
finally he had to turn merchant and sell his own wares.
To keep down labour costs when wages were at boom levels
owing to railway construction, he employed in 1864 some
Kanakas brought by Captain Towns to cultivate and pick
cotton in the same district. The Queensland Parliament
marked the significance of his success by voting him its
thanks in 1867, and making him a grant of land. Within
two years over 5000 acres were under cane. In 1872-3
some 65 mills turned out 6266 tons of sugar and 161,473
gallons of rum. The colony’s own needs were already met
and an export trade to the value of ;{^3658o3 provided the
moist brown sugar that remained familiar in station rations
until the ’nineties. Here was the main chance for settlers
on the steamy coastal rivers — an export industry with an
almost unlinuted market.

Clearing was expensive, but soil and climate were so
favourable that crops could be won from only half-cleared
land. The heavy work was done in May, June and July —
the winter months — “when we usually have very fair
working weather as regards heat”. After the biggest trees
were felled and burnt up at a cost of ;^io an acre, forest
land was ready for a heavy plough and a bullock-team. To
clear scrub land and remove the stumps would have cost
£4.0 an acre. So a variant of “Mullenizing”^ was prac-
tised. The scrub was cut and burned at a cost of about £4.
an acre, and cane sets were planted among the charred
stumps in holes made by hand with a hoe. After five ratoon
crops from this planting and after the stumps had rotted, the
land was ploughed for the first time. Putting white labour
to work the mills and vats, and Polynesians to do the
hoeing, cutting and other drudgery, the sugar-planters
counted on averaging out wages at four shillings a day.
They planned to compete with other sugar colonies owing
to “ our having millions of acres of background whereon can
^ See chapter xiii, supra.

SECESSION FOR NORTH Q^UEENSLAND 243

be raised horses, cattle, corn, beef, mutton and all planta-
tion necessaries at the cheapest rate, without importing,
as is generally necessary in other places at a very exorbitant
price”.

Had it been left to the pastoralists and planters, the
two Queenslands would have made black labour the instru-
ment in this mutual service. As sugar boomed, more and
more Kanakas were drawn in for the plantation gangs.
Moreover, the fount and origin of the squatters’ demand for
separation from New South Wales had been their intention
to obtain convict labour again ; and, when Southern op-
position barred the way, the leaders in the new colony had
looked about as a matter of course for other supplies
of cheap service on the stations. Quests for Chinese and
Indian coolies broke down under the pressure of Imperial
and Indian officials for proper regulation. In the ’forties,
Benjamin Boyd, a cool scamp, who sought to found a
rival to Sydney on Twofold Bay in Southern New South
Wales, had brought in Polynesians to act as shepherds
on the Riverina stations. But the British authorities had
objected to forced recruiting, and Boyd’s shepherds died
of the climate and homesickness. In 1863 Captain
Robert Towns brought over 67 more of these islanders in
the ‘Don Juan’ to work his Moreton Bay cotton fields.
When cotton-planting came to nothing as the American
War of Secession died down, Hope used them in his sugar-
plantations and thereby added an expansive demand for
rough cultivators and cane-cutters to the standing pastoral
demand for station hands. The colonies were now self-
governing and British opinion was wary of fresh responsi-
bilities in the Pacific. “Black-birding” rapidly rose to
considerable proportions. 1237 islanders were brought over
in 1867, and 900 more during the first four months of
1868. By this time there were 700 Kanakas in station
employment.

A cry for regulation of what looked very like a revival
of both slave-trading and slavery arose both within and

244 PLANTATION SLAVERY AND

without the colony’s boundaries. The self-respect that the
young nation had been taught by British humanitarians
in the movement to abolish transportation of criminals
revolted afresh against forced recruiting of men of other
and alien stocks. Democrats feared the presence of a race
which they held incapable of an equal franchise. The wage-
earners to a man drew together to resist the menace of
cheap and unfree labour. ^ As early as 1868 the Queensland
Parliament made a law to regulate recruiting in the islands
and the treatment of Kanakas on board ship, but its
ability to enforce the law was negligible. The Admiralty
had predicted as much. ‘‘Whatever regulations may be
made for the liberty and well-being of these people, or
their being brought nominally within the laws and tri-
bunals of Queensland, no proper and efficient control can
ever be exercised over the manner in which these people
are obtained ^nd placed on board ship.” Recruiting was
going on for island plantations and South America as well
as for Queensland. It was likely “from the nature of the
work to fall into the hands of an unscrupulous and
mercenary set who, under pretence of persuading natives
to make engagements as labourers for a term of years,
would not hesitate to commit acts of piracy, kidnapping
and murder”.^ A Polynesian Protection Act was passed by
the British Parliament in 1872 and a High Commissioner of
the Western Pacific was appointed in 1875. These measures
strengthened the Navy’s hands, but, so long as Britain
refused to annex the islands, foreigners defied both Navy
and High Commissioner. Kidnapping, massacre and re-
prisals continued. When various powers had annexed the
Pacific Islands east of Australia, the labour vessels, hailing

^ See Myra Willard, History of the White Australia Policy ^ p. 161 : “The
labouring classes hated the Kanaka brother whom they saw with as much
zeal and heartiness as the philanthropists in England loved the dusky
Islander whom they had not seen ”,

* M. Willard, op. cit. p. 144; “Whoever else has reason to be ashamed
of the part they played in the Pacific Island traffic at least the naval
authorities have nothing to regret”.

SECESSION FOR NORTH QUEENSLAND 245

not from Queensland ports only, betook them to New
Britain and New Ireland in 1882, and in 1884 to New
Guinea. The German Foreign Office bluntly called British
attention to their misdeeds and asked British aid “to
prevent any transgression at the limit which divides the
lawful traffic of Polynesians from slave-trading”. A Liberal
government in Queensland, under Samuel Griffith, there-
upon amended the Polynesian Labour Act with the aim
of ending the traffic altogether in 1890.

In the conflict of opinion within the colony, liberal and
selfish motives, political and economic ambitions, crossed
and criss-crossed. Between 46,000 and 47,000 Kanakas
were brought into the country. So long as they were
employed on stations, aboi.t the towns and on casual
work — mostly contrary to their “agreements” — they died
like flies, at nearly five times the rate for Europeans of
similar ages. Under the liberal laws and regulations in force
after 1888 they were legally employable only on tropical
agriculture and there was an appreciable decline in the
mortality. It was not that the sugar-planters were more
humane than squatters and others, but that the Kanakas
on the plantations could be more readily watched, and their
masters more easily charged with hospital expenses. At
best, however, the mortality among Kanakas remained four
times as heavy as that among the white colonists. In 1893
it was 52-57 per thousand when that of European men,
women and children was only 13-3. Forced to rough
pioneering work to which they were unused and in which
they felt no joy or personal interest, despised and cursed
by the average colonist, they were in fact, if not at law,
chattel-slaves.

With such “hands” the sugar-planters worked north-
ward from one fertile pocket of land to another. In the
early ’seventies they were booming the Mary River.
Farther north at Mackay, John Spiller, after studying the
industry in Java, tested twenty acres in 1865. He suc-
ceeded so well that many others followed him thither.

246 PLANTATION SLAVERY AND

Planting sugar-cane was to all appearance a form of
agriculture exempt from such irksome tasks as the annual
ploughing and sowing. Shoved into holes in the untilled
surface of half-cleared land, the favourite “Bourbon”
variety grew large and succulent canes that seemed immune
from disease. Small owners planted it up to their cottage
walls, and neglected weeding and “trashing” when new
are^s could be turned to profit so easily. Large mill-owning
planters plunged into debt to extend their machinery.
Any one who had ever lived on a sugar plantation else-
where was ipso facto an expert, to be put in charge of such
construction.

The dream was too rosy to last. On the Brisbane
and the Mary in 1873 and around Mackay with greater
virulence in 1874, there appeared, in a night, a “fire-
blight” or rust at first attributed to frost. The Bourbon
cane looked as if it had been burnt. All were heavy
losers save a few who had tried “Black Java”, a quick-
maturing smaller cane, which proved immune. This grew
in one season, as against two for Bourbon, and the warmer
north matured it better than the southern river-valleys.
So the disaster pushed the industry farther north, and, as it
was then believed that whites could not work in the tropical
sun,^ its dependence on the Kanakas was increased.

Mackay boomed once more. Those who had won through
the crisis had learned their business under Queensland
conditions. By 1877-8 there were 15,220 acres under
sugar-cane, the yield had recovered to more than its pre-
blight level (12,000 tons of sugar), and 196,662 gallons
of rum were made from the residues. The sugar exported
reached a value of ^0286,222 in 1880, partly through a
temporary rise in price. So eager became the rush of
selectors for “homesteads” in the sugar areas, under the
Douglas Land Act of 1876, that the Mcllwraith govern-

* Miss Flora Shaw wrote in 1893 difference between a Javanese

or black man and a European working in the tropical sun as “ the difference
between a humming bird and a sick sparrow’*.

SECESSION FOR NORTH QUEENSLAND 247

ment suspended homestead selection at half-a-crown an
acre, and re-classified the land. Even at trebled prices
and more, 240,000 acres of sugar land were sold between
October 1881 and March 1882, and sales continued.
Many bought to sell at future prices rather than to grow
sugar, for the area under cane only rose from 20,000 acres
in i88o~-i to 48,000 in 1883-4. Once more, established
wealth seized upon openings meant by the lawgivers for
new men. As the lands filled from which cane might be
carried by water to the crushing mill, tramways came into
vogue and empty land held by speculators meant longer
tramways and dearer hauls.

The high price of sugar in 1880 did not hold. The period
from 1 860 to 1 900 was marked, as a whole, by a persistent
fall that was due to the competition of beet-sugar, stimulated
by bounties in Continental Europe.^ Yet, through three
phases in which differing expedients were found to answer,
the Queensland industry steadily grew, with but little
tariff advantage in its southern market. In bringing under
cultivation extremely fertile though limited areas the
planters used — and used up — a supply of cheap and servile
labour. In meeting European competition the industry,
with government aid, learned economy in crushing its
cane by central mills. In replacing brown and ‘‘mill-
white” sugar by the best refined grade it was most com-
petently served by the Colonial Sugar Refining Company.

So long as Queensland was a separate colony the planters
fought with success to retain their coloured labour. Their
fight compels the admiration few can withhold from
a minority resolute to the end, but Australian opinion
was heavily and increasingly adverse. They forged, in the
North Queensland Separation Movement, a weapon which
(like the Confederate States of Jefferson Davis) gave their
purpose the guise of a crusade for self-determination.
When the popular hatred of Kanaka labour sent to Bris-

^ W. H. Traill, A Queenly Colony (1900), p. 71, quotes prices of £2^ to
£2^ in 1872, £11. 15^. in 1893 *4^- in 1899.

848 PLANTATION SLAVERY AND

bane parliamentary majorities pledged to put down slavery
and slave*trading, the North cried aloud for local autonomy,
exposed every electoral and public works scandal, and
reasoned at Westminster that the Crown should set up
a new colony or colonies north of Dawes Range or the
tropic. But when friends trod the stage at Brisbane and
islanders might be had more easily, the hot fit passed and
constitution-making was forgotten like a tropical fever.

On geographical and financial grounds they had as good
a case for local autonomy as ever colonists had ; indeed,
after the ’seventies they had a better case than the Darling
Downs and Moreton Bay had made good in the ’fifties.^
When separated from New South Wales the infant Queens-
land had boasted only 28,000 white colonists. By 1 87 1 those
north of Dawes Range already numbered 27,000, and the
gold and silver found inland as well as the sugar-planting
that spread steadily up the coast gave every promise of
further rapid growth. The very prosperity of the North
debarred its active participants from making their voices
effective in Brisbane. How could the planter busy with
his crop and with the development of his estate, the miner
battling for gold over the rough coastal range and the
inland pastoralist on guard against natives and drought
neglect their work to attend long sessions in a capital far
away in the south-east Brisbane is nearer to Sydney
than to Bowen, nearer to Melbourne than to Cooktown.
Kennedy, a northern constituency, elected John Bright in a
conventional gesture of despair. But whether they attended
or no, the Northern representatives were powerless to pre-

^ See Qwensland V, and P, passim^ Correspondence re Separation of North
Queensland, and Q^P. Debates, 20 August to 3 September 1886.

* A brilliant Australian journalist, A. G. Stephens, who had lived in the
North, asked in 1893: “What would you think of a man who told you the
circulation of the blood would be more perfect if the heart were placed in
the big toe?. . .The result would probably be to make us crippled, blind,
deaf, dumb and idiotic. Long before that, however, we would be exter-
minated by some race of men whose hearts were normally situated”.
Why North Queensland Wants Separation (Melbourne Public Library, PoL Econ,
Pamphlets) .

SECESSION FOR NORTH QUEENSLAND 249

vent a Southern majority from pledging the revenues to pay
for loans and public works that developed the South alone.

The Colonial Office had beyond doubt contemplated
further divisions of the Northern mass when Queensland
was severed from her mother colony. Dr J. D. Lang, its
protagonist in Sydney, had more than once mapped out and
named the future northern colonies. The Imperial Parlia-
ment had by statute made explicit the Crown’s power to
proclaim them. In the name of self-government, justice
and clean administration, the planters, when the occasion
called for their eloquence, claimed for their chosen domain
the logical, legal and honourable gift of freedom.

Both at Brisbane and Westminster ministers found that
all they could attempt against such tempestuous bowling
was to play out time. In 1872 the Earl of Kimberley asked
for a full discussion in the colonial parliament and an
expression of policy from ministers possessing its con-
fidence. Without these Her Majesty’s Government could
not ‘‘entertain a question of such paramount importance”.
This was a rebuff. A worse setback was the acceptance
in that year of a policy of Imperial supervision of the
recruiting of islanders. For a decade separation had to
wait. The planters were on the defensive. In 1883 Samuel
Griffith, having fought and won an election on the issue
of Indian and Kanaka labour, enacted stricter regulations
limiting the employment of Kanakas to tropical and semi-
tropical agriculture. The aliens should at least be con-
fined to the tasks for which they were ostensibly indentured
and, as was alleged, were uniquely suited. What was more,
Griffith enforced his regulations and made the importation
of more Kanakas illegal after 1890. Immediately the separa-
tion movement revived both in the North and in Britain.

The petitioners contended that the Earl of Kimberley’s
stipulations had been fulfilled. Expressions of policy had
certainly been forthcoming from the Premier of the colony,
though they were emphatically against separation, and a
discussion in the Brisbane Parliament had ended in the

250 PLANTATION SLAVERY AND

defeat of a motion favouring separation by 36 votes to 9,
the Southern members voting with one voice against it.
But such opposition, contended the Northern leaders,
made good their case for liberation from such rulers. A new
Secretary of State (H. T. Holland) sought fresh ground
on which to set aside the new petitions. With much effect
the Northern colonists quoted an Imperial statute passed
two years after the separation of Queensland from New
South Wales, giving the Crown authority to change the
boundaries of colonies “established or to be established”.
They cited, too, an explanation of that Act by the Duke
of Newczistle to the first Governor of Queensland. “ I am
not prepared to abandon definitely, on the part of Her
Majesty’s Government, the power to deal with districts
not yet settled as the wishes and convenience of future
settlers may require.” But the Colonial Office unearthed
another condition precedent. The Secretary of State an-
nounced to the House of Commons (1887) that the Law
officers advised that no step could be taken by the Crown
without fresh legislation. Such legislation would be pro-
posed only after some resolution in favour of the change had
been carried in the colonial legislature.

This was a hard ruling. If the concurrence of a majority
in the New South Wales legislature had been required in
1859, it would certainly have meant the strangling of
Queensland at birth. Such a rule meant the cessation
in Australia of that internal colonization, under the name
of territorial organization, which had created self-governing
frontier-communities across the North American continent.
There were, no doubt, powerful forces in alliance in 1 887
to frame and applaud such a ruling. The petitioners had
been tactful enough to scout the bare idea that their
Separation League was a Home Rule movement. Nobody
could be more fervently loyal than they. Yet if local
autonomy had been granted in Queensland, what torrents
of awkward questions about Ireland would have poured
upon the Unionist ministers of 1887! Moreover, separa-

SECESSION FOR NORTH QUEENSLAND 251

tion would cut in two not only the map of Queensland
but also the taxing-power on the future growth of which
London investors had counted when they had taken up
Queensland bonds to the amount of sixteen millions
between 1859 and 1885.^

Thought for bondholders’ interest in the undiminished
taxing-power of the government responsible for the service
of the debt may already be traced in 1887. In the replies
made to the separationists thereafter it was put more and
more plainly. Yet the planters would not admit defeat,
though they knew that their arch-enemy^ had stated the
case against them in terms that carried full weight with
the Colonial Office. Westminster might be unfriendly for
the nonce. They were noi dismayed. The party that
normally countenanced coloured labour as a means of
extending the industry might acquiesce in Griffith’s
amending act giving notice of the cessation of all ‘‘black-
birding” and importation of Kanakas after 1890. Such
turns and twists of the political weathercocks did not shake
the planters’ faith in a course they thought to be dictated
by the facts of soil and climate. The flag of secession still
flew high in the North. Griffith’s dream of “preserving
Queensland as a future field for European settlement”
would fade as light dawned even on that restless mind.
Governor Musgrave, though he commended to his official
superiors at Westminster Griffith’s “clear, temperate and
able exposition of the views of the ministry”, could not
share his opinion that sugar-cane would eventually be
cultivated successfully in the tropics by white labour.®

^ The analogy between the North Queensland movement and the forma-
tion of new states in the American Union would not reassure the City.
Cf. W. E. Adcock on “The Separation Movement in the North”, Victorian
Review i February 1885.

* At their social gatherings in North Queensland it was customary to

drink to the toast of D. S. G., i.e. “D n Sam Griffith’*. “Sugar**, as

The Times remarked 12 October 1885, “does not sweeten the temper of
its growers.’*

* Sir A. Musgrave to the Secretary of State for the Colonies, 13 April
1885, covering a statement by the Premier to the Governor, i April 1885 —
an admirable state paper.

1252 PLANTATION SLAVERY AND

Griffith waved aside all doubts. ^‘The same thing used

to be said of Moreton Bay It was not to be thought

that Europeans would work on the plantations on the
same conditions as coloured races. ” They would, he con-
tended, cultivate it under different conditions, as a large
population of resident owners working their own properties,
unless that result were prevented by the introduction of
inferior races in large numbers. Rather than the colony
of the planters’ dreams, with a government, representing
employers for the most part absentees, exploiting an inferior
race or races, he would prefer “a separate territory
governed as a Crown Colony” by an impartial civil
service. But the coastal strips where tropical agriculture
was possible were few and not continuous. The mineral
lands in the ranges and the pastoral lands on the plateaux
by reason of their high elevation differed in no important
particular froth rest of the pastoral lands of Australia.
The present ascendancy of the planters at Mackay was
not valid ground for entrusting them with the future of
such wide territories.

Popular opinion in Queensland and in the Southern
colonies applauded, even though they did not fully com-
prehend, the vision of this lean, impatient idealist.^ He saw
in the North the field for an experiment in European
settlement unimpeded by any attempt to unite races of
wholly different culture in a constitutional colony. Like
every great-hearted Australian, he rated high the oppor-
tunity of constructive progress unembittered by racial
feuds. And from an unexpected quarter there came means
to further the experiment he desired that carried it to
within sight of full success.

Planters like Hope of Cleveland who crushed and made
sugar from their own cane were puzzled, impoverished
and held back by agricultural, chemical and engineering

^ C. A. Bernays, Queensland Politics during Sixty Tears^ p. 73, draws a pen
portrait of Griffith, justly emphasizing “a strange trait in his character
that he never entirely pleased himself”.

SECESSION FOR NORTH Q^UEENSLAND 253

difficulties beyond their training. To accept the advice of
soi-disant experts was to incur capital costs which the output
did not justify on the falling market in which their sugar
had to be sold. Only the finest calculation, the best
engineering and chemical skill, extracting the last pound
of sugar and turning out the most attractive quality, could
make headway against the technical energy and state aid
behind the best sugar of Continental Europe. The necessary
capacities could be trained, however, by separating the
tasks of growing, crushing and refining.

Angus Mackay, a Sydney engineer sent by Queensland
in the early ’eighties to investigate cane-sugar pro-
duction in the French, British and Spanish West Indies,
reported immense advances in the French islands and
decline elsewhere. This he ascribed to the Central Factory
system, which had separated cane-farming from sugar-
manufacture, making them even more distinct than
wheat-growing and flour-milling. Powerful machinery and
boiling in vacuo, economically feasible only on a large
scale, enabled the genuine central mill to give the grower
more for his cane than he could win from it himself with
obsolete plant.^ The system had already been put into
operation by the Colonial Sugar Refining Company on
the Clarence and Richmond Rivers of Northern New
South Wales. There the company bought from the
growers the standing cane at from ten to fourteen shillings
a ton, cut it by gangs of its own employing, brought it
in large shallow-draught droghers to its mills and there
crushed and boiled it. Final manufacture took place at
the company’s refinery at Pyrmont, Sydney.

Mackay predicted the rapid extension in Australia of
this plan — “one of the most certain solutions of the labour
difficulties which beset sugar production all over the
world”. The main desideratum would be skill capable of
supervising in the mills and the refinery powerful machinery

^ Angus Mackay, Sugar Cane in Australia, 1883, pp. 136 et passim.

254 PLANTATION SLAVERY AND

and subtle processes. Good machines and good manage-
ment in the field and the boiling houses would extract
sugar at falling cost as experience increased. The colour
of the labour tending the cane would become a matter
of taste.

So, in the ripeness of time, it may happen. But Griffith,
true to the idealists’ trade of being disappointed, wished to
speed up the slow crawl of events. He clutched at the
central mill as an expedient to force the transition to white
labour in sugar production. In 1885 unemployment in
Queensland had been aggravated by assisted immigration.
He induced Parliament to vote ^{^50,000 to build or
subsidize cane-growers’ companies in building central
mills. The cane brought to them, he stipulated, must be
grown by white labour alone. Plantations were already
being cut up into small farms and Griffith meant the new
mills to make i§tigar for these small-holders. But they
proved unready as yet to grow cane by white labour only
as some of the farmers on the northern rivers of New South
Wales were doing. At the mills erected in the Mackay
and Port Douglas districts the rule against ‘‘black” cane
could not be maintained. While Kanakas remained, the
whites would not work with them in the cane brakes,
though they willingly took work in the mills from which
Kanakas were habitually shut out.

Yet the change-over made progress. Though they had
shown the way on the northern rivers, the directors of the
“C.S.R.” were still arguing as late as 1890 that sugar
planting in the tropics could not do without coloured
labour; but in the very next year the company was selling
its North Queensland plantations on easy terms to farmers,
as “a partial solution of the labour difficulty”. The
gentleman-planter who had owned broad estates and
worked them through an overseer by Kanaka gangs, who
had crushed and, as far as he knew how, had refined his
own sugar in a plantation mill, was losing his economic
ascendancy. The small farmers into whose hands such

SECESSION FOR NORTH QUEENSLAND 255

estates were divided employed perhaps a Kanaka or two
each, but no Kanaka might own land. Now that the rough
pioneering of the industry — the clearing and planting — had
been done, coloured labour had become an anachronism
and a clog. The hardest-headed Australian trust had re-
organized the work among small farmers growing the
cane, seasonal white labour cutting it and machine-
fitters, tenders and chemists manufacturing the sugar

Political separation for North Queensland in the ’seventies
or ’eighties would have set up the type of colony which
had an unhappy record in the West Indies — an aristocracy
of white planters deriving wealth and ascendancy from
the exploitation of semi-servile labour. Though the
planters refused to admit political defeat in 1887, the
small farmers and the skilled employees in the mills
and refineries were cutting away the economic basis
of their leadership, and in the ’nineties the Northern
Separation Movement collapsed in its hour of seeming
triumph.

About 1890 it had been reinforced and supplemented
by a demand from the Rockhampton district for a third

^ The Colonial Sugar Refining Company took over in 1855 the refining
business of a predecessor, the Australasian Sugar Company, which was
established in Sydney in 1842 with an initial capacity of a thousand tons
a year. The original shareholders of the C.S.R. Co. were J. H. Ghallis, James
Robey, Edward Knox, Walter Lamb, Alfred Spry, Daniel Cooper, William
Fanning, T. J. Nankivell, William Walker, Archibald Walker and Edwin
Tooth, and its capital was £75,000. From 1855 to 1887 the liability of the
shareholders was unlimited — at law — and accounts were not published.
The ordinary shares of the limited liability company registered in 1887
were “paid up” to the value of £600,000. Amalgamation with the New
Zealand Sugar Company was sanctioned at the first ordinary meeting
of the new company. The volume of Reports and Speeches ^ C.S.R. Co,
1855-1912 in the Mitchell Library is a most impressive record of the
company’s success and power to mould political action. See especially
the Chairman’s speeches for the half years ending 30 September 1889,
31st March 1890, 31st March 1892, 30th September 1894 (the acquisition
of the Australasian Sugar Refining Co. of Melbourne — Poolmans’), 31 March
1895 (reflections on the effects of the company’s production out-growing
the needs of the Australasian markets), 31 March 1899 (Parliament has
agreed to continuance of duty of £3 per ton on sugar imported into New
South Wales).

256 PLANTATION SLAVERY AND

colony of Central Queensland, and in this demand the
pastoralists of the West, notably those about Winton and
Boulia, played a part. They petitioned in 1887 and again
three years later, when the hour for the exclusion of black
labour was striking, that in the event of separation they
should be placed in the severed area. Sir Samuel Griffith,
now in coalition with his old antagonist Sir Thomas
Mcllwraith,! sought to turn the flank of this massed
attack by a plan for a federal Queensland. United
Provinces, either two or three in number, should enjoy
local autonomy under a central legislature. On the
formation of an Australian Commonwealth this central
legislature would merge into that of the nation. First
framed in 1890 as a means of side-tracking separatist
motions in the Brisbane Parliament, Griffith’s new plan
was dropped because no one but its author was interested
enough to cofliprehend such complexities. In 1891 it
came up again as a counter to the draft bill in which
at Lord Knutsford’s invitation the Central Separation
Committee set out to demonstrate the consistency of its
ambitions with the security of the public creditors of
Queensland.^ The Griffith plan was defeated, however,
in committee of the Brisbane Assembly.

Still the Colonial Office held the ardent separationists
at arm’s length. Sugar was tumbling in value, and cheap
labour, the separationists urged, was their one way to
prosperity in their competition with the bounty-fed product
of Europe. Sir Samuel Griffith’s proposals for local auto-
nomy while preserving the union, said Westminster, had
not yet been fully considered. If the bill were defeated a

^ ‘*A big portly frame with a bulldog head and neck, Mcllwraith in his
day filled a niche in Queensland politics which no one else could fill, but
perhaps it was as well that a brake was put upon him just as he was getting
into his stride. He should have lived in the United States of America.”
C. A. Bernays, op, cit. p. 56.

* Griffith’s Constitution of the United Provinces of Queensland would
have done this by leaving a reserve taxing power, untrammelled by any
limitation, in the General Assembly. Here again its influence on Australian
political development has been great.

SECESSION FOR NORTH QUEENSLAND 257

second time, the occasion would then have arrived for
Her Majesty’s Government to consider whether Imperial
legislation was necessary to cut the knot. Griffith fought
on, fertile of expedient after expedient to avoid complete
separation and the irretrievable breach between tropical
and temperate colonies which he knew it would involve.
He was not helped by the strikes and guerilla warfare on
the stations in which his former working-class allies were
engaged. He admitted that good government of the North
was not practicable from Brisbane and conceded the case
for local control of expenditure. Three united provinces
would be best, he advised, but he drafted alternative bills
for three or two.

The Assembly preferred two, and in that form sent up
the bill to the Legislative Council. There it was rejected
on the ground that it had not been passed by the two-
thirds majority in the Assembly which constitutional
amendments required. Griffith’s last guard seemed beaten
down when, on the top of that defeat, he had to admit in
March 1892 that Kanakas were still needed to bridge
the gap of time until estates had been sub-divided and the
North peopled with white farmers. The coalition govern-
ment, to relieve the paralysis of the sugar industry by
falling prices and the refusal of white labour to cut cane
at low wages, conceded a temporary renewal (no set term
being stated) of the Polynesian Labour Regulation Act.
Griffith’s warmest admirers shook their heads. What
malign influence, they asked, had made so great a man
recant his ideal after spending the best years of his life
in cleansing an Augean stable?

The planters made haste. The rough force of facts and
prices had tripped up their enemy. In February 1893, full
of high hope, they put their overwhelming case to a new
Liberal Secretary of State, the Marquis of Ripon. Griffith’s
last expedient, the Decentralization Bill, had been rejected
after full discussion. As they had predicted, the South
still refused to listen to reason. They had fulfilled every

258 PLANTATION SLAVERY AND

condition precedent. But still Westminster would not
move. A general election was impending in Queensland.
It would be improper not to await the result.

That election brought forth a puzzling situation. The
new political labour party, representing the miners, station
hands and wages men of the coastal towns hitherto op-
posed to northern separation, polled so strongly in the
North that they grew confident of winning power in a
separated parliament. Such sinister support of the old
cause, financial chaos, coastal floods, and inland drought
confused and divided the planters’ counsels. Desperately
anxious to avoid any obligation to these new allies, they ap-
proached still another Secretary of State for the Colonies
late in 1895. The reply they received from Joseph Cham-
berlain proved cold comfort to men all too well aware how
southern Australians viewed their peculiar institution. ‘ ‘ The
people of Cental Queensland will no doubt find the Federal
Government, when constituted, ready to listen to any
reasonable scheme which may be submitted to it with the
object of giving them that independent control of their
own affairs which they now seek.”^

Abandoning hope of aid or action from Whitehall, the
planters gathered all possible allies for a last sally in the
Brisbane parliament ; and by the casting vote of one of
their leaders in the Speaker’s Chair they carried the day.
The Assembly resolved that the time had arrived when
the Central and Northern divisions of the colony should
be constituted separate colonies in compliance with the
petitions of the inhabitants thereof (4 November 1897).
Yet the separation was not made. The time had not
arrived. Sir Samuel Griffith, though now as Chief Justice
‘‘above the thunder”, was still too much for them. He
pointed out to Dickson, the Queensland Premier of 1898,
that federation offered a way of escape. With federation
the White Australia policy was sure of overwhelming and
nation-wide support. That November resolution made
1 J. Chamberlain to the Governor of Queensland, 15 January 1896,

SECESSION FOR NORTH QUEENSLAND 259

certain not Separation, but Queensland’s tardy entry into
the work of founding the Commonwealth.

Such was the last contest in Australia between a landed
aristocracy and the industrial democracy, the leaders of the
past and the clamour of the future. It compares strangely
with the war of secession in the American Union. The
warning roar of that conflagration awakened Australians
in good time to the menace of a servile under-race. By
legislation they barred its growth. But unluckily, their
timely determination to check the establishment of planter
communities in the Australian tropics became entangled
in a resistance to any devolution of effective governing
powers by the colonies of 1863. The North Queensland
planters and their allies associated the cause of internal
colonization with coloured labour for long enough to damn
both together. The Colonial Office refused to use the
Crown’s power to proclaim fresh colonies save at the
request of the colony to be sub-divided. This was an
insuperable veto. Embodied in the Commonwealth Con-
stitution it still prevents in the self-governing states of
Australia any alteration of the haphazard boundaries drawn
before 1863. instance the discrepancy between the

political and the economic boundaries of the regions served
by the existing ports is so great that the railways of one
state penetrate deeply into the hinterland of another. The
makeshift is better than the customs barriers of pre-
federal days, but it is eloquent of an inability in Australian
leaders, despite the vaunted homogeneity and the re-
markable social similarity of the communities they govern,
to adapt the map of the Continent to the needs of the
nation.

17-a

CHAPTER XV

O <<^ o

An Apostle of Restriction

the opening of the period of colonial particularism

/\ (1860-1900)5 Victoria, thanks to her endowment of
alluvial gold, stood far above her neighbours in
population and prestige. For a generation she retained her
lead and set the tone of intercolonial relations. But her
ways were ungenerous, like those of an inept man defending
a fortune won by luck.

In i860 the Australian population had grown to
I >1453585, of whom 538,234 were in Victoria, 348,546 in
New South Wales, 125,582 in South Australia, 89,821 in
Tasmania, 28,056 in Queensland and a handful of 15,346
marooned at the far-off Swan River. With 6*i persons to
the square mile as against Tasmania's 3-4 and New South
Wales' I'l, the Victorian hive was still attracting most of
the newcomers, and its governors, uplifted with pride, were
loth to abandon the faith that this would continue and that
callings would be found for the ex-diggers, for the rising
generation and all new arrivals.^ What did it matter that
the squatters bought out the selectors and elbowed wheat-
growing into the plains beyond the Divide? Unprecedented
progress had given the people an exhilarating sense of power.
They had done great things together and had the will to
do them again. Here, ready to a leader’s hand, were the
core and fibre of nationalism, ‘'that simplest of all ideals
which has in its nature no political affinities either with

1 By 1870 the estimated population of Australia was 1,647,756 of whom
723>925 were in Victoria, 497,992 in N.S.W., 184,546 in S.A., 115,272 in
Queensland, 100,886 in Tasmania and 25,135 in W.A. See Australian
Demography. Bulletin no. 43, p. 239. The density of population per square
mile in 1870 was: Victoria 8*2 persons, Tasmania 3 8, N.S.W. i*6.

AN APOSTLE OF RESTRICTION 261

liberty on the one hand or with tyranny on the other;
it can be turned by some chance current of events or by
the cunning or clumsiness of statesmen to run in any
channel and to work any wheel
The leader, or rather the driver, came in the shape of a
newspaper dictator. David Syme, a tall, square-shouldered,
thin-lipped, grey-eyed Scot of Scots had been brought up
by an austere father, a North Berwick dominie and a
solitary Tory among Whigs. Seemingly the old man had
no “melting” left in him towards the youngest of a family
of seven, five of whom were boys. “ I have no recollection”,
said David Syme long afterwards, “of ever having ad-
dressed him directly in my life, even to the extent of asking
him a question. If the idea of doing so ever entered my
brain I never had the courage to carry it out. It had been
firmly impressed upon me that I had to do as I was told
and ask no questions.”^ He impressed the same lesson on
the public and the Premiers of Victoria for over forty years,
“Time after time”, records his pupil and biographer,
“the people saw The Age use political leaders and parties
with the indifference of a carpenter who flings his hammer
carelessly aside after it has driven in the nail. Syme only
supported men as long as they were whole-souled ministers
of the principles he advocated.”^ He practised persuasion
by a simple, effective method. “His first step was to an-
nounce clearly and lucidly his ideas, and to couch his
announcement in a form that assumed, however startlingly
original his views, that he was merely expressing a settled
public opinion. There was no hurry, no flurry, no forcing,
no impatience. He was often greeted with an outbunt
of popular derision. He ignored it, and when it was over

^ G. M. Trevelyan, England Under the Stuarts^ p. 117,

^ Quoted by Ambrose Pratt, in his David Syme: the Father of Protection in
Australia, p. 4.

® For examples of “King David’s** disciplining of ministers of his own
creation who hesitated to do his bidding, see Pratt, op, cit. pp. 167, 175, how
his editor, Windsor, attended Cabinet meetings to dictate his ultimata,
and p. 249, how James Munro followed Syme to a distant country estate,
to beg reprieve from a sentence of dismissal, in vain.

262 AN APOSTLE OF RESTRICTION

he returned placidly to the charge. The process often
extended over years. But gradually his ideas fertilized.
Each reiteration made them a little more definite, a little
more familiar, a little more acceptable. . .until at last his
ideas with all their consequences were publicly embraced.” ^

Those ideas reflected the history and character of the
man who propagated them. Life had reiterated his father’s
lesson of self-reliance. He had studied theology of an
unorthodox hue under Morison of Kilmarnock, had tasted
at Heidelberg the Hegelian dialectic of progress through
contradiction, had learned proof-reading and privation in
Glasgow, gold-mining in California and hostility to the
squatter-rulers of Victoria when they evaded his appeal
to be reinstated on a ‘‘jumped” claim (which proved a
most successful one) at Mount Egerton. Socially he was
a “thrawn body”, retiring to the point of being a recluse,
but in thoughitdde was as adventurous and as contemptuous
of convention as the diggers were in action. With the zeal
of an anchorite he summoned them to make Victoria a
“self-contained, self-supporting, independent nation — a
nice-balanced industrial community, composite, stable and
progressive ” .

In i860, on the death of his brother Ebenezer, who had
left the staff of the Westminster Gazette to seek relief from
phthisis by emigration to Victoria, David Syme became
both proprietor and editor of the Melbourne Age^ a strug-
gling newspaper which he had purchased for a small sum
four years earlier to ensure its continuance. He made it the
mouthpiece of views of which he thought himself the sole
prophet^ and in his advocacy of which he no doubt

^ Ambrose Pratt, op. cit. preface, p. xxvii. Even the pious Pratt confesses
to doubts of the effects of “ruling the state by a process of plausible sug-
gestion”. “It breeds public apathy” (p. 251).

* Cf. Pratt, op. cit. p. 59: “I know of no one in Australia who believed
in Protection except myself”. But in this he was mistaken. T. A. Goghlan,
Labour and Industry in Australia^ p. 1140, draws attention to the American
and artisan influences “latent in the minds of a large section of the popula-
tion” and to the formation of a Tariff League in 1859. A pamphlet by
G. W. Cole, M.L.C., Protection as a National System suited to Victoria^ published

AN APOSTLE OF RESTRICTION 263

pictured himself as a young David going forth to do battle
with a sling against the heavy-armed squatting and mer-
cantile interests.

From the first Australian tariff imposed by Governor
King to the days of colonial self-government British goods
had enjoyed preferential treatment in the Australian
market. That was fundamental in the old view and treat-
ment of colonies as means to the mother country’s enrich-
ment. From 1808 it took the form of a general levy of
5 per cent, ad valorem on all goods not of British manu-
facture. With small changes according to the needs of
revenue this tariff remained until the finding of gold and
the era of self-government. When New South Wales and
Victoria were separated there were specific duties on spirits
and tobacco and ad valorem duties on imports generally, 2
per cent, being levied on goods from the United Kingdom
and 10 per cent, on those of all other countries. In the
tariffs of pre-gold days, despite some traces of protection
to local industries such as distillation and sugar refining,
and an element of preference to British traders, the
dominant idea was undoubtedly to raise revenue by an
all-round impost easily collected at the ports.

The preference to goods from the United Kingdom was
swept away by the colonial legislatures in 1851. They
needed revenue badly and felt themselves to be no longer
means to the ends of British trade. Apart from this, the
tariffs in New South Wales and Victoria remained much
as they had been before the gold discoveries and the grant
of self-government, though New South Wales kept a higher
duty on sugar in defence of the refinery on Parramatta
Road. The Deas-Thompson Tariff of 1852, the new star ting-
point of New South Wales fiscal history, imposed duties on
spirits, wine, beer, tobacco, tea, coffee and sugar. That of
1855 Victoria also set import duties on seven classes of
goods and an export duty of 2s. M. an ounce on gold.

in Melbourne in i860 and consisting mainly of extracts from List, shows
that German thought was not without influence.

264 AN APOSTLE OF RESTRICTION

By i860 the eager and somewhat raffish men who were
finding less and less gold each year were clamouring for
other openings, and Victorian legislators, even those who
had at first regretted the diggers’ coming, could hardly
acquiesce with folded hands in the passing of the young
colony’s attractiveness. Manhood suffrage left them no
choice. Carried in 1857 by Haines, a squatter Premier, it
gave power to make the laws, or at least to choose the
law-makers, to strata of the population that were impatient
for their turn of the good things government could give and
in their inexperience disinclined to count the cost.

A purely revenue tariff is a late product of fiscal ex-
perience, born of disillusionment with the complex results
of government manipulation of trade. It implies an
abandonment in the general interest of log-rolling by
sections. Among the newly-enfranchised strata, however.
Were British aiijisans accustomed to action through trade
societies in defence of particular markets for their skill,
and Americans and Europeans to whom protective duties
against British manufactures were familiar boons. The
golden age was fading to the light of common day. Late
in 1861 nine thousand able-bodied diggers went off to
track the rainbows in New South Wales and Otago. To
fill their places the colonial parliament continued to
subsidize immigration, voting in that year :;{^79,ooo to
pay passages. During 1862 five thousand immigrants
arrived, and a land act, setting aside a quarter of the
land revenue, provided an additional 20,000 for the
purpose of immigration in 1863.

At this juncture the man in the street worked out an
easy corollary from Wakefield’s theorem. As the govern-
ment had used public revenues to bring labouring folk to
the colony, it was under an obligation to find work for
them. The Protection and Anti-Immigration League was
a natural working-class retort to middle-class prejudices
against Gawlerism. Let the government stop glutting the
labour market with “new chums” and, if it will not itself

AN APOSTLE OF RESTRICTION 265

employ men on public works, let it impose a tariff that
will enable local manufacturers to do so and compete with
imported goods. Such reasonings found an incisive cham-
pion in David Syme in his new role of leader-writer. “By
the system of naked competition our manufacturers or
mechanics are prevented from even making a beginning
in the work of opening up new sources of industry among
us”, he wrote in what his biographer claims to have been
the first unequivocal Protectionist article in any Australian
newspaper. To found new industries seemed simple enough,
but “a ban is put upon the attempt at the very outset; and
in a few short years hence, if this prearranged practice
of national industrial abortion is continued amongst us, the
people of Australia vvill be utter strangers to all scientific
skill and practical dexterity in the arts and manufactures
of highly civilized nations as are the Bedouins of Barbary,
or the Tartars of Central Asia. Is this a desirable result?
Is it desirable that, instead of carrying with us the arts of
advanced civilization from the parent State in Europe to
this remote land, we should purposely, and as it were
with ‘malice afore-thought’, upon quitting the shores of
that parent State, cast behind us and abandon the know-
ledge and the practice of those great industrial arts, which
have constituted and still constitute the sole groundwork
of her characteristic pre-eminence in trade, commerce and
wealth? Is it not on the contrary rather desirable that we
should endeavour to perpetuate amongst us, in our new
home, that civilizing and enriching skill and trained
industry which is a part of our national inheritance?”

The importing interests attempted to silence Syme by
withdrawing their advertisements from his paper. He
reduced its price from 6t?. to 3«/., to 2//., and finally in
1868 to id. The Government of the day, under John
O’Shanassy, joined his enemies in 1863 and withdrew
the Government announcements. But Syme’s unflinching
stand and powerful attacks on the self-interested motives
of his opponents caught the popular imagination. His

266 AN APOSTLE OF RESTRICTION

paper’s circulation doubled and trebled. Advertisers could
not afford to ignore such a medium of publicity. By the
general election of 1864 he had won his fight and was in
command of the enthusiastic popular following which re-
mained faithful to him till his death in 1908, “marching
to the ballot box and voting in a placid phalanx for
reform”.^

James McCulloch^ who had displaced O’Shanassy be-
fore the election, though continuing to declare himself a
free-trader, carried, after a severe constitutional struggle
with the Legislative Council, a tariff of moderate duties on
apparel, textiles, boots, saddlery and earthenware, while
reducing the duties on tea and sugar. He argued that
local industries must be helped through their days of
infancy and high costs.^ Logically such a justification
should have suggested subsidies rather than import duties.
For a subsidy^o the infant industry would have enabled
it to sell its wares at the same price as the imported goods,
thereby sparing the consumer the rise in price consequent
on import duties and confining the cost of protection to
the taxes required to provide the subsidy. Even the choice
of import duties should logically have been tempered by
a plan for their steady reduction as the industries became
“naturalized” and efficient.

Syme, driving his fellow-colonists on the way of “re-
form” that he had chosen, sought no temporary protec-
tion. Any suggestion of infantile inefficiency in colonial
manufactures he met by a characteristic counter-offensive.
“The articles with which the Victorian market has been
deluged would have been dear at any price. They were,
and they continue to be of a kind almost worthless,

^ Ambrose Pratt, op. cit. p. 251.

2 John Stuart Mill {Principles of Political Economy, Book v, ch. i, sec. i)
regarded temporary duties on imports as defensible on economic grounds
where industries perfectly suitable to a young country had still to be
“naturalized’* there. But C. H. Chomley {Protection in Canada and Australasia,
pp. 81--2) quotes a letter by Mill to a Victorian student of his work em-
phasizing the limitations which he placed on their safe use.

AN APOSTLE OF RESTRICTION 267

becoming unfit for use with a month’s wear-and-tear;
and however low in original price, they are a source of
constant and excessive expenditure and their purchase-
money in the end turns out to have been but a profitless
and wasteful outlay. This is no exaggeration; it is the
simple fact which is obvious and patent to all.” It cer-
tainly became the credo of every Age reader. He denied,
too, that import duties raised local prices. They were
meant to shut out the ‘Toreign-trader” with his trashy
wares, but internal competition would infallibly keep local
manufacturers and dealers from raising the prices of their
honest products.

Why, in such a small and sheltered market, they should
compete to spoil the profFc^'ed chance of charging prices
near the foreign trader’s landed cost plus duty was not
made plain. Presumably the local manufacturers would
always and in all instances be patriots as disinterested as
David Syme undoubtedly was.

For him the tariff of 1866 was no temporary expedient
but merely a beginning. He overthrew its author McCul-
loch in 1871 and Charles Gavan-Duffy, another free-
trader, in 1872. They had dared to reason with him and
had refused to impose higher duties. Syme was by this time
impatient to make high import duties the stimulus to an
all-round progress in the industrial arts.^ One might have
expected such a student, and a Scot too, to have known
that necessity, not affluence, is the mother of invention
and that the industrial arts have grown with painful
slowness here and there, seldom transplanting easily or
in assorted collections. But the need for protection was
self-evident to expectant employers and artisans. Nor did
the danger of interruption of the colony’s supplies from
overseas fail to receive emphasis, every war-cloud being
greeted in Syme’s columns by thunder-claps of headlines.

^ G. W. Cole, Protection as a National Sy:ilem suited to Victoria (i860), had
urged “a comprehensive scheme that would foster every branch of manu-
facturing industry and give security to those who would embark their
capital in manufacturing enterprise”.

268 AN APOSTLE OF RESTRICTION

It was “good journalism”, and the phalanx of his fol-
lowers swelled to numbers as formidable as they were
faithful. All the old allies who had fought to unlock the
land were enlisted in its ranks. Duties on imported flour
and grain won the allegiance of farmers with whom South
Australian foreigners were still competing for the Victorian
market. Miners dreamed ofindustrial jobs at regular wages
when the anxiety and exposure of rush and gully-camps
would be no more. Prosperous manufactures would make
Victoria a great nation. “A country given up purely to
pastoral and agricultural pursuits would afford no scope
for men of artistic and constructive talents.” The scepti-
cism of the squatters — the old “stinking fish” party — only
roused the fighting ardour of the protectionist forces. Was
it not to the interest of such men that the colony should
depend for revenue on selling its Crown lands to the
longest purses?^

After a series of unstable ministries, Syme triumphed in
1877. McCulloch, still recalcitrant, was overwhelmed at
the polling booths, and Graham Berry, Syme’s ex-Chartist
protege, pushed through Parliament after a momentary
reluctance “a Protective tariff in every sense of the ex-
pression”, dictated by the great silent chief himself.^ The
ad valorem duties it imposed ranged to 30, 40 and in a few
instances 45 per cent., and were backed, where these were
thought more effective, by high specific duties. “King
David” ruled supreme. By 1883, James Service, the stiffest
free-trader left in public life, bowed to his majesty and
was installed as colleague with Graham Berry in a coali-
tion required and forced by Syme to straighten out the
finances of the colony. Service accepted Syme’s condition
that he should not interfere with “the declared economic
policy of the country”, that is, a tariff of duties on imports
averaging 25 per cent.

In its ostensible and immediate purpose of increasing
employment in Victorian manufactures, protection was
^ See Ambrose Pratt, op, cit, pp. 170-2.

AN APOSTLE OF RESTRICTION 269

successful. Between 1864 1874 the number of fac-

tory hands in Victoria increased fourfold. Twenty-eight
thousand were “in work” where there had been only
seven thousand. Yet this was hardly a decisive advance
in artistic and constructive talent. At an intercolonial
conference on tariffs in 1870 the protectionist Treasurer
admitted that Victorian manufactures “consisted mainly
of goods which are made up wholly or in part from im-
ported materials”.^ The sewing machine was largely
responsible for a big increase in the industrial employment
of women during the ’seventies and ’eighties. As the policy
of borrowing tens of millions in London to build railways
and ports accentuated the need for exports to pay interest
on this capital equipment, industrial employment was not
found capable of swelling the list of staple produets ex-
ported. Industry came to the aid of agriculture in that
the best agricultural implements were of local invention
and make. But the necessity that produced them had
arisen before the days of Syme, and the most rapid
agricultural development of this generation took place in
the ’nineties under free trade in New South Wales. Prior
to federation, Victorian factories sold the bulk of their
output in the Victorian market and, if a contemporary
pamphleteer is to be trusted, “dumped” at cut prices
such of their goods as they sent to other colonies to com-
pete with the foreigner.^ That would assist New South
Wales farmers rather than their fellow- Victorians.

Yet in young communities like Victoria, so long as
growth is rapid and virgin resources remain to be de-
veloped, hope takes every plan conceived for an accom-
plished fact. In 1887 The Age, attributing to protection
the turn of immigration back into Victoria that accom-
panied the railway mania and land boom of the mid-

1 J. G. Francis, Report of Intercolonial Conference on Tariffs, Melbourne,
June-July 1870.

® Max Hirsch, Protection in Australia (1900), Table XXIV, p. 31, showing
the prices charged in Sydney and Melbourne for certain Victorian manu-
factures.

870 AN APOSTLE OF RESTRICTION

’eighties, announced “the startling fact that protectionist
Victoria. . .in a few years will have left New South Wales
far behind in the race for commercial supremacy

But while the scribe was yet writing, the hours of Vic-
toria’s greatness were fast running out. Ten years later,
New South Wales, in spite of her adherence to “Cob-
denism”, had drawn ahead of Victoria in population, had
gained upon her even in manufactures and exceeded her
in tfie industrial arts that call for brain and sinew. If,
indeed, Victoria’s policy of protection had been judged
by its efficacy towards the grand object for which it was
shaped — the absorption of the population left without
callings by the exhaustion of the alluvial diggings — by i88i
it had already been found wanting. Sixty thousand men
had departed during the intercensal period 1871-81 and
had left the colony with fewer adult males than it had
possessed whe^that decade opened.^ Protection had not,
in popular estimation, made it easier to find employment
in Victoria. The demand that state aid to immigration
should cease was enforced by the prevalence of unem-
ployment as early as 1873.^

The colonies other than Victoria rested content, for the
most part, with tariffs designed primarily to raise revenue.
Queensland duties on refined sugar and ‘‘golden syrup”
impelled the Colonial Sugar Refining Company of Sydney

1 “Protection in Victoria and Free Trade in New South Wales”, a series
of articles published by The Age in March and April of 1887. As evidence
that “our exports are largely and increasingly exports of our own manu-
facture” the writer relied on (i) the trade in agricultural implements to
the Riverina, a part of N.S.W. nearer Melbourne than Sydney to which
the Victorian Railways quoted special railway freights, and (ii) exports of
flour.

^ T. A. Goghlan, Labour and Industry in Australia, p. 1481.

® State-aided immigration continued in South Australia until 1886, in
N.S.W. until 1888, in Queensland until 1891. It had been intermittent
only in Tasmania between 1835 1887. See Commonwealth Demography,

Bulletin no. 44, p. 276. For phases of public opinion regarding it the following
pamphlets should be read : (a) How Victoria may be more Prosperous and Wages
Higher, by an old M.L.A. (1867); {b) British Work for British Capital and
Patriotism, by Anglo-Australian (1869); (r) State Aided Immigration, by D.
Bennet, 2nd Inter-Colonial T.U.G. (1884),

AN APOSTLE OF RESTRICTION 271

to establish a branch refinery there in 1892.^ In South
Australia “fiscal indecision” was the normal state both of
leaders and tariff. The main interest of a community very
active in primary production was free inter-colonial trade,
but protective duties aided the establishment of clothing
factories and a woollen mill.^ In New South Wales Sir
Henry Parkes was as earnest an advocate of free trade
as David Syme was of protection in Victoria. In his
political youth he dallied with the idea of protecting local
industries^ but on his return from a lecturing tour in search
of British immigrants he proclaimed himself an ardent
free-trader (1862). Pastoral and financial opinion inclined
to a policy which kept down the cost of living and of
production for export, while the abundant revenue from
the sale of Crown lands left its rulers relatively untempted
by the ease with which big sums might be raised at the
Customs House. Under Parkes’s dominance of her politics
during the ’seventies and ’eighties the mother colony ad-
hered to his fiscal faith. Nor did that policy indefinitely
retard, as David Syme thought it must, the establishment
of manufactures. Not in population only but in the
opportunities of employment New South Wales steadily
overhauled Victoria.^ The industries of the former colony,
moreover, not only afforded more employment to men,

^ See the speech of the Chairman of Directors (T. Buckland) at the
general meeting for the half-year ending 30 September 1892, C.S\R. Co,
Reports^ Mitchell Library.

^ See T. A. Coghlan, op. cit. pp. 1 1 55-59.

® See resolutions proposed in N.S.W. Assembly of 22 May i860.

* The following table showing excess or deficiency of arrivals over de-
partures is from the Commonwealth Tear Book, 1901-1907, No. i, p. 154;

Period

Victoria

New South Wales

1871-1875

~ 5>595

29.741

1876-1880

- 5.665

73.459

1881-1885

+27,786

+ 109,863

1886-1890

+86,231

52.565

1891-1895

—46,848

21,464

1896-1900

-63,582

997

1901-1905

-5 *.603

21,073

1871-1905

-591676

+307,168

272 AN APOSTLE OF RESTRICTION

but exploited the natural advantages of coal and raw
materials and were therefore better able to weather the
crises of the ’nineties.

Victoria’s “national policy” did not maintain her
primacy in population and wealth. Perhaps that ambition
was too high. But the attempt set up stresses in inter-
colonial relations which made the period one of disin-
tegration and drove the leaders in all the colonies into
a jfealous provincialism. Six intercolonial conferences, in
the years 1863, 1865, 1867, 1870, 1871 and 1873, sought
relief from the irksome restraints of customs barriers at the
borders. At each the disagreement grew more bitter. The
first conference drafted a light revenue tariff of duties
on wines, spirits, beer, tobacco, sugar, coffee, cocoa,
opium, dried fruits, candles, oil sand salt — with one excep-
tion “conventional necessities” in ordinary consumption
and therefojr^dmirable objects for indirect taxation. The
delegates, being the Premiers of their respective colonies,
agreed to urge their parliaments to accept this common
tariff as the means of intercolonial free trade and joint
prosperity. It was to be maintained unaltered until
changes proposed by any one colony had been considered
by all in conference. Out of such an agreement would
quickly have grown a Customs Union collecting revenue
at coastal ports only and distributing it among the colonial
treasurers according to population. The Premiers went
home proud of having found a happy solution of border
problems, only to find themselves a generation ahead of
their followers.

At the moment New South Wales needed additional
revenue. The sale of Crown lands under the Robertson Act
had hardly begun to bear fruit. Nor was there wanting
a feeling that Victorian protectionism would add to the
attractiveness of Sydney’s harbour and make Sydney’s
warehouses the distributing centres for the Eastern colonies
and the islands.^ Victoria, in the first fever of Syme’s

^ Throughout the ’sixties and early ’seventies Victoria tried hard to induce

AN APOSTLE OF RESTRICTION 273

inoculation with the protectionist serum, felt strong dis-
taste for even intercolonial freedom of trade. Both the
major colonies rejected the simple unalterable tariff and
without them the others were scattered members.

As the Premiers had foreseen, awkward problems arose
on the inland borders as a result of the enactment of
different tariffs at the far-distant capitals. The boundaries
of New South Wales, Victoria and South Australia cut up
the Murray-Darling river-basin, scene of the main pastoral
activity, without the least regard for the unity which the
area should have derived from the navigation of the rivers.
In September 1853 Francis Cadell had proved that navi-
gation was feasible by piloting a little river steamer built in
Sydney, the ‘‘Lady Auguste ”, from the Murray Mouth to
Swan Hill and biinging back 441 bales of Riverina wool.
Before i860 he had traded with Albury, Gundagai and
Menindee on the three main streams.^ The value of
stations on the Darling doubled, it was said, on the day
he reached them. To be rid of such irrational things as
customs houses in the back blocks, Victoria and South
Australia arranged that duties on goods passing up the
Murray into Victoria should be collected at Adelaide,
while New South Wales and Victoria assimilated their
tariffs. That was in 1854. Two years later the discovery
of a goldfield in New South Wales but near enough to the
Victorian border to be better served from Melbourne than
from Sydney tempted the elder colony, at the instance of
its merchants, to handicap the Melbourne trade thither
by charging duty a second time at Albury and other
Murray River crossings. Smuggling proved easy and the
manoeuvre was futile. In 1864, however, as settlement
became active in the Riverina, New South Wales talked
of strict administration all along the Murray, especially
at Moama opposite Echuca, the Victorian river port,

the P. & O. Company to make Melbourne the final port of call for its mail
steamers. See The Argus, 25 July and 25 August i860, and The Postal
Question, 1873 (Mitchell Library Pamphlets).

^ A. G. Price, Founders and Pioneers of S, Australia (1929), pp. 221-53.

274 an apostle of RESTRICTION

unless Victoria would pay over as subsidy a fair share of
the duties collected at Melbourne on goods that passed
through Victoria into the Riverina.^

Melbourne had but lately made herself a more effective
centre for the Riverina trade by the construction at very
great expense of a railway to Echuca. This would afford
a regular and rapid service far superior to the tedious and
seasonal navigation of the Murray. Unwilling to lose the
trAfhc, Victoria managed to exact a quid pro quo for the
subsidy asked by New South Wales. She expressed a
willingness to pay the subsidy if, while refraining from
setting customs officers on the Victorian border, the mother
colony would post them where the Murray entered South
Australia to tax goods coming up the river. Melbourne
merchants would then have free access by rail to the
Riverina, but South Australia's ambition to increase the
river-borne ^de would be effectively scotched. Along the
Murray the country settlers talked of shooting any customs
officers that appeared and their threats did not go un-
reported even by The Age^ usually given to admiring such
officials. After an acrimonious negotiation New South
Wales and Victoria entered into a ‘treaty” in 1867 at
South Australia’s expense.^

Such a bargain suggested to Victoria’s smaller neigh-
bours, Tasmania and South Australia, that they should
bargain too in defence of their export to Victoria of
agricultural products. Mutual concessions, they were
astonished to find, were barred by the terms of their
constitutions which forbade the grant to anyone of tariff
advantages which might be inconsistent with British policy,
including British treaties of trade and commerce with
European countries.^ The Colonial Office, regarding this
provision as a spur to complete freedom of trade, made
the most of the diplomatic difficulties which intercolonial

^ Sir John Young to the Earl of Carnarvon, 24 January 1867. The
agreement, as the Colonial Office preferred to call it, was duly ratified
by the N.S.W. Parliament in August 1867.

^ Duke of Buckingham to Governor of New South Wales, 7 January 1868,

AN APOSTLE OF RESTRICTION 275

reciprocity would involve. Tasmania, impatient of ad-
versity, sought to retaliate against Victoria with a raised
tariff if she might not negotiate with a lowered one. She
proposed to levy on imported goods duties varying with
the treatment accorded to those of Tasmania in the
country of the imports’ origin. This, too, was ‘^reserved”
for the Colonial Office’s consideration. Another inter-
colonial conference was called at the suggestion of Tas-
mania. It met at Melbourne in June 1870 to consider again
the project of a Customs Union. This the Colonial Office
would allow, for it would constitute a new diplomatic unit.
Freedom of trade between its constituent parts would not
be open to ‘The objection of principle which attaches to
differential duties”.^

Again a common tariff and a unified customs adminis-
tration dividing the revenue from indirect taxes according
to population slipped through the colonial leaders’ grasp.
New South Wales stood firm for a reven^’c tariff only,
and withdrew as soon as Victoria, intent upon playing
the part of Prussia in this Southern Zollverein, demanded
that all should adopt her national policy of protection.
Nay more. She refused to contemplate a tariff alterable
by general consent alone. For a specific term she demanded
full and sole power to make changes in the tariff.

The only point upon which the conference could reach
unanimity was in proclaiming to the Colonial Office the
right of free colonies to make their own terms for reci-
procity in trade. Bills designed to raise this constitutional
issue passed the Tasmanian and South Australian houses
and were duly reserved for the Royal assent. In reply,
the Secretary of State for the Colonies (13 July 1871)
thought it would be inexpedient to invite the Imperial
Parliament “to legislate in a direction contrary to the
established commercial policy of this country” and to
admit intercolonial reciprocity. Charles Gavan-Duffy as

1 Circular Despatch from the Earl of Kimberley to the Australian
Governors, 15 July 1870.

276 AN APOSTLE OF RESTRICTION

Premier of Victoria certainly spoke for all when he ex-
pressed the colonists’ impatience at “being treated as
persons who cannot be trusted to regulate their own affairs
at their own discretion”. Julius Vogel, the able Attorney-
General of New Zealand, sought to persuade the Colonial
Office that its refusal to countenance reciprocity was
actually fostering retaliation and aggravating the tendency
t9wards protection.^ More conferences, one in September
1871 and another in February 1873, at long last per-
suaded Downing Street. The Australian Colonies Duties
Act of April 1873 allowed them to make whatever trade
agreements and laws between themselves they might
desire.

The light had dawned too late. Divided sovereignty had
done its work, and faith in common action had wilted while
the power to move towards it was withheld. Growing
discrepancy^etween the tariffs of the two main colonies
inevitably broke down even their sinister agreement about
trade across the Murray. When Victoria adopted a heavier
tariff and New South Wales in 1873 cut hers down to
45 specific duties, it became worth while to send goods
in bond from Melbourne to the Riverina, to release them
free of duty on New South Wales territory and send them
back at low freights into Victoria. Victorian Ministers
promptly denounced the “treaty” of 1867 and established
customs houses on their side of the border. But South
Australia did not gain by this dispute between her
rivals for the Murray trade. The Victorian railways still
quoted special freight rates on goods and produce to and
from the Riverina. To obtain what she held to be her
share of the trade within her own territory, New South
Wales extended her railways and cut the rates again. At
Albury in 1876 Sir Hercules Robinson, her Governor and
a staunch advocate of railways to serve primary produc-

^ The most incisive comments on the effects in Australia of the Colonial
Office’s attitude towards tariff-making may be found in the Tasmanian
Governor du Cane’s despatch to the Earl of Kimberley, 29 September 1871*

AN APOSTLE OF RESTRICTION 277

tion in the interior, deplored the disintegrating effect of
intercolonial tariffs, railway feuds and breaks of gauge,
^'The policy of railway extensions has been almost solely
one of isolation, directed mainly to the object of securing
by one device or another, for the rival capitals, as much
of the traffic of the country as possible. . . . It is the interest
of the country at large that the traffic should flow through
its natural and most economical channels, and any at-
tempt to divert its course by restrictions or artificial
regulations is simply a waste of wealth and power and a
common loss.”

In that generation, however, the interest of the country
at large had no means of expression. Continued bickering
between New South Wales and Victoria over the inland
customs barrier came to a climax in 1877 when Victoria
imposed heavy duties on the transfer of live stock over
the Murray. It was the night of provincialism. Diffi-
culties and habits of mind that have since proved fruitful
of ill-feeling and absurdities were being aggravated by
local leaders, each intent on serving the part he loved
and unconscious of a common weal.^

On one issue — perhaps the most fundamental of all —
the colonial leaders in Eastern Australia reached unanimity
of thought and action, that is, on the exclusion of Chinese

1 John Robertson, the “King Goodheart” of Free Selection before
Survey, rose at a banquet held in Sydney during November 1872 to
celebrate the establishment of telegraphic communication with England,
to congratulate South Australia on filling the last gap. “Mr Robertson”,
reports the Sydney Mail, 23 November 1872, “put in a claim on behalf of
New South Wales for its mead of praise on the ground that it had the
largest extent of telegraph lines, and to himself for having been the Minister
under whom the first construction contract in N.S.W. was carried out,. . .
South Australia, with more eagerness than wisdom or courtesy, has seized
a coveted opportunity of forestalling its neighbours and had completed a
bargain which, having been made in haste, would have to be repented of
at leisure. The line through Central Australia would some day prove a
failure.’’ Possibly a reference at the end of the report to failure on the part
of the caterer for the banquet may explain, though it may not excuse,
Mr Robertson’s “courtesy”. The party was “shrewdly out of beef!” Yet,
tragically enough, there was much truth in his libel on South Australia
and her line. See chapter xx, infra.

278 AN APOSTLE OF RESTRICTION

labour. The restrictive laws by which the coming of Chinese
miners had been impeded in the ’fifties were quietly
repealed in the ’sixties, having served their purpose.
In the early ’seventies a Queensland Government even
opened negotiations for the introduction of Chinese coolies
to work under indenture in the sugar industry. Then
alluvial gold and silver were found on the Palmer River
(1873) and on the Hodgkinson (1875). Both are in torrid
country, and when a fresh influx of Chinese came to dig
for gold the feeling once generated at Buckland River and
Lambing Flat was accentuated by the virtual monopoly
the Chinese obtained. In 1877 on the Palmer field behind
Cooktown there were 1 7,000 licensed Chinese miners and
only 1400 whites.^

The Thorn ministry passed through the Brisbane Par-
liament a measure imposing heavy licence fees, which
Governor Gawns reserved for the Royal assent on the old
ground that such laws were inconsistent with British treaties
with China. The Earl of Carnarvon confirmed his action
but let it be known that the Royal assent would not be
refused to a Bill which refrained from singling out the
subjects of China for onerous treatment.

Governor Cairns’ reservation of the measure called
forth a loud outcry from the Queensland liberals, which
was echoed farther south by ministries to which Thorn
appealed for common action on this constitutional issue.
But the Earl of Carnarvon’s hint was taken and in 1877
and 1878 restrictions on the coming of Chinese were
framed in forms consonant with the British treaties. Those
who returned to China within a limited period, moreover,
were offered the refund of their entrance fees. As in the
earlier episode, the decline of alluvial digging ere long
made any such taxes prohibitive. By 1881 the Chinese in
Queensland were only 11,200 in number and newcomers
were barely a hundred a year.

^ P. C. Campbell, Chinese Coolie Emigration (1922), pp. 61 et seq, and
Myra Willard, White Australia Policy (1923), chapter iii.

AN APOSTLE OF RESTRICTION 279

Before that natural solution was reached on the
tropical diggings, however, Chinese labour had become a
formidable problem on Australian coastal ships. On this
issue it fell to New South Wales to lead in proposing
exclusion. In 1877 the Australasian Steam Navigation
Company, under pressure of competition, replaced British
seamen by Chinese on three of its vessels. The arrival of
a hundred more Chinese seafarers at Sydney in November
1878 gave token of an intention to extend their employ-
ment. Almost throughout the Company’s fleet the white
seamen struck, and the wage-earners of the ports and
capitals supported them with enthusiasm by public de-
monstration and union levies. The Queensland Govern-
ment, closely sympathetic with the popular feeling, notified
the Company chat it would withdraw the mail subsidy
from vessels so manned. Thereupon, early in 1879, the
Company agreed to reduce gradually the Chinese element
in the crews. Sir Henry Parkes having fought and won an
election on the issue of Chinese exclusion, the New South
Wales Assembly at his instance adopted a Bill to revive
the old restrictions and to add a prohibition of the em-
ployment of Chinese on vessels registered in the colony.
As the excitement died away after the success of the strike,
the Legislative Council postponed the Bill. But the
working men in all the eastern colonies were in grim
earnest. They had learned the extent of their influence on
political leaders and they kept up their pressure until, about
1881, practically uniform laws against Chinese immigration
had been enacted in all those colonies. Public opinion on
the question was kept alive by California’s troubles with a
much bigger inroad of Celestials, by fears not altogether
groundless that the Chinese would bring to Australia
diseases like smallpox and leprosy that were endemic in
Asia, and by an untimely project for indentured Chinese
labour on the north-west coast of Australia.

This proposal, though of small moment, precipitated
united action at an intercolonial conference called by Sir

28o an apostle of RESTRICTION

Henry Parkes in 1880. It involved the importation of
some fifty Chinese only and was termed a “temporary
expedient”. It served, however, to evoke from the Con-
ference a warm protest which was sent in its name to the
Earl of Kimberley.^ The Governor of the Crown Colony
of Western Australia sought through the Colonial Office
to reassure the governments concerned. It was a matter
of sentiment without practical moment. In that sentiment,
however, the self-governing colonists were more nearly
unanimous than in any other. Only Tasmania neglected
to levy a heavy capitation tax on immigrant Chinese and
to define strictly the number which any vessel might intro-
duce. At the instance of the Adelaide Legislative Council
the South Australian measure was not to apply to the
Northern Territory then under that colony’s jurisdiction.
But in 1886 even Western Australia, now that gold-digging
had spread toJier tropics, fell into line.

Recklessly lighting the fires of class conflict, the
colonists were all too ready to bicker among themselves
on internal problems such as free or safeguarded selection.
They might build railways to divert and divide, and
tariffs to impede, their central trade. Their notion of
progress in industry was to “protect” faint copies of
industrial triumphs in their old home. But the general
will was agreed that the wage-earner’s standard of living
must not be spoiled by alien intruders whose docile
assiduity, however charming to employers, was unwelcome
in British Australia.

^ N.S.W,V, and P. Session 1880-1, vol. m, p. 325.

CHAPTER XVI

O ,

Inland Transport

The early pastoralists had to live the whole year
round on the wide tablelands and plains that the
explorers had glimpsed and scrambled through.
Once he was sure of water, the squatter’s main problem was
transport. In days when the industry had to find its own
convoys, stores and wool cairied by packhorse and bullock-
waggon moved painfully, straining endurance near to
breaking point. Tropical rains would make the black soil
plains of Queensland virtually impassable for weeks on end,
and it was no unusual thing in the ’sixties for a bullock-dray
to take three months on the way from Mitchell’s “Fort
Bourke” to Bathurst.

In 1847-8 Alan Macpherson formed a new station at
Mount Abundance, west of the Darling Downs near the
junction of the Cogoon River and Bunjeywargorai Creek.
In January 1848 he found himself, after a flood, under
the necessity of pushing out to it with rations from Keera
on the Gwydir in northern New South Wales. He started
on February ist with a dray lightly loaded, ten bullocks,
two drivers and a Keera black to track any bullocks
that strayed. In three weeks they covered a hundred miles,
about a third of the way. Then they entered boggy
country. They spent February 28th getting stores over the
Boomai River in a tub. Finally they wrapped the flour in
a tarpaulin and set the bullocks to drag the dray through
“the shoalest part of the river”. On the far bank the team
were bogged up to their middles, so the men carried
the flour from the dray, still in mid-stream. It was well
they did. After further attempts to scramble up the west

282

INLAND TRANSPORT

bank, the bullocks turned in mid-stream and, despite a
well-plied whip and much bush rhetoric, pulled out
again on to the east bank. Twenty-two times that day
Macpherson had swum what in writing he termed ‘^this
unpleasant river”. Towards dark, another tremendous
thunder-shower caught them with the sugar uncovered.
They spent ten days more in crossing a dozen miles of
bad country. Then conditions mended. The ‘‘boss” was
a^Dle to push forward to Mount Abundance with word of
the relief, and to reach it on March 25th. ^

George Hobler met similar trials as he journeyed slowly
down the Murrumbidgee after March 1845 search of
relief from the catarrh which had decimated his Merinos
on Mummele, south of Goulburn. In August he was
breed to put his stores across the flooded river on a raft
nade from six casks. Then they swam the bullocks over,
hauling th^twaggon through, under water, was a heavy
business. “It soon sank so deep as not to leave a ripple
on the surface, and it was rather an anxious time as we
gained steadily on the rope. At last the point of the pole”
— which had been lashed upright to prevent its getting
foul of any timber — “broke the water again and the whole
machine gradually emerged. As we could not pull it up
the bank, we put a team of oxen to it, when lo ! the rope
broke and the waggon began to walk back again into deep
water. But it stopped before it got too deep for us. We
made fast with chains and dragged it out safely. The
same by the drays.”

Such strainings alternated with endless slow trudging
over flats.

When the wool teams in season came down from Coonamble
And journeyed for weeks on their way to the sea.

Until the digging days, “made roads” were unknown
beyond the coastal settlements. Major Mitchell surveyed
the main northern road as far as the Hunter River in 1829.

Mount Abundance: Experiences of a Pioneer Squatter ^ by Alan Macpherson,
Blairgowrie (1875), Mitchell Library.

INLAND TRANSPORT 283

Newcastle had till then been accessible only by sea. A year
later, Mitchell was at work on the southern road and on a
new road to Bathurst to replace what remained of “ Captain
Cox’s wonderful but somewhat primitive highway”. Over
the gullies and water-courses wooden bridges, too often
destroyed by bush-fires, were one by one replaced by
stone after 1832. In this Mitchell was aided by David
Lennox from Ayrshire, a pupil of Thomas Telford. Len-
nox, a working mason, had been foreman on a bridge
that Telford built near Gloucester. He brought to the
colony clear memories of its 150 foot span, a thing of
beauty borrowed by Telford from a bridge over the Seine
at Neuilly. '‘Thus originated”, wrote Mitchell in 1855,
“all the bridges this colony p assesses worthy of the name. ”
Lansdowne Bridge over Prospect Creek on the Southern
Road, though not Lennox’s first stone bridge in New South
Wales, was the first in which he re-copied the Neuilly arch.^
But Mitchell was not happy in his control of the
“government men” on the roads. In 1836 actual con-
struction was handed over to the Royal Engineers. They
could certainly discipline the convicts, but unluckily they
could not work the survey instruments. When the supply
of convicts petered out in the ’forties, the roads, according
to the Constitution Act of 1842, became the care of district
councils empowered to levy local rates for their upkeep.
But the districts into which, in 1843, “a few scratches of
the Governor’s pen” had divided the settled areas around
Port Jackson and Port Phillip failed to excite the local
patriotism of either councillors or ratepayers.^ The colonists

^ In 1844 Governor Gipps sent Lennox to bridge the Yarra at Melbourne,
which he did by Old Prince’s Bridge, a single span of 150 feet opened on
15 November 1850. It was demolished in 1884 when the river was widened.
Under the new Victorian Government Lennox built over 50 bridges, and
had charge, at a salary of £^^00 a year, of all construction of roads, wharves
and jetties. See his biography by Henry Selkirk, Jburnfl/ of the Royal Australian
Historical Society^ vol. vi, part v.

* Gf. Sir G. Gipps’ homily on finance to the N.S.W. Legislative Council,
23 July 1839, quoted in “Notes on History of Local Government in
Victoria**, by A. W. Grcig, Proceedings of Victorian Historical Society, 1925.

284 INLAND TRANSPORT

thought the building of roads a proper charge on the
“land fund”. This flowed into the central treasury and
seemed a desirable alternative to the imposition of local
rates and taxes.

After an interval in which the excellent “convict roads”
fell into disrepair, Mitchell resumed charge of the turnpike
roads. But the tolls did not go far. Labour was scarce,
and, as the settlers jolted over roads that had once been
t:&e colony’s pride, they no doubt sighed heavily for the days
of the government gangs.^ For use on the unmade inland
tracks to and about the diggings, newcomers from America
brought with them the idea of vehicles that dispensed
with the need of roads. These were the bush-coach, always
associated in Australia with the name of Cobb & Co.,
and the American buggy. The main feature of their con-
struction was a light body suspended by straps above four
wheels of large diameter. This simplicity made repair
possible anywhere. A wheel or swingle-tree might come
to grief in collision with a stump that a sleepy driver had
failed to notice in the dark or the dust ; but he was a poor
hand indeed if he could not cut a sapling to replace the
broken spoke or fix up the broken traces with the aid of
the local fencing wire. As a means of rapid conveyance
the bush-coach was hardly comfortable. “When drawn
at a smart trot — its usual pace — on a jolting road, some-
times running in a rut from which it jumps now and then
with a shudder, or upsetting in a hole hidden by a puddle
of water”, a French observer was ready to term it “an
instrument of torture.”® Nor was its rough charm en-
hanced by the usual concomitants of dust, heat, and
incessant attacks on ears, eyes and nostrils by a cloud of
flies which rode on each traveller’s back, and reserved
their best efforts for the sandy uphill pinches where to
ease the horses everyone got out and walked. Yet for all

* See Major Mitchell’s Report upon the Progress made in Roads and Public
IVorhs in New South Wales 1827-1855 (Sydney 1856), Mitchell Library MSS.

* F. Joumet, L’Australie p. 215.

INLAND TRANSPORT 285

their discomforts and inelegance the American coach and
buggy admirably suited the countryside. Light and supple,
they rattled over the inequalities of thousands of miles
where the formation and upkeep of roads were beyond
the means of a thin skirmishing line of settlers. You might
drive them up a hillside or through a forest, or over a
“road” which had set into a thousand deep ruts of baked
mud. To arrive anywhere, if you did not ride a horse,
there was no other choice.

The leathern “springs” of Cobb & Co.’s coaches date
back to 1853 and the Bendigo diggings.^ Four Americans
founded the firm — Freeman Cobb, John Murray Peck,
James Swanton and John Lamber — but its best brain
was another American, James Rutherford, who with five
partners bought out Cobb & Co. and reorganized the lines
about the Victorian diggings. Having gained a monopoly
of the Victorian mail-contracts, Cobb & Co. drove a
cavalcade of 103 horses, 10 coaches and 2 feed waggons
over the border to Bathurst in 1861 . There Rutherford and
Walter Russell Hall fixed their headquarters. Thence
they spread their services throughout the back country.
After 1865 they conquered Queensland. “By 1870 Cobb
& Co. in the three eastern colonies were harnessing
6000 horses per day, their coaches were travelling
28,000 miles per week, their annual pay-sheet exceeded

1 00,000 and they received £95,000 per annum in
mail subsidies.

Swift scramble up the siding

where teams climb inch by inch,

Pause, bird-like, on the summit —
then breakneck down the pinch
Past haunted half-way houses —

where convicts made the bricks —
Scrub-yards and new bark-shanties,
we dash with five and six —

^ William Dcakin, father of Alfred Deakin, was an accountant in the
firm of Cobb & Go. when the future Prime Minister was born in 1856.
See Walter Murdoch’s Alfred Deakin (1923).

286

INLAND TRANSPORT

By clear ridge-country rivers,

and gaps where tracks run high,

Where waits the lonely horseman,
cut clear against the sky;

Through stringy-bark and blue gum,
and box and pine we go :

New camps are stretching ’cross the
plains the routes of Cobb & Co.^

Their routes showed the way to the railways, the motor-
lorries and airways of to-day. As the locomotive appeared
on the main lines, Cobb & Co. went farther out. In
the ’eighties they plied on 4000 miles of Queensland
‘‘roads”, and the last coach was taken off the Yeulba-
Surat run only in 1924, passing thence to the Queensland
Museum.

Bullock-waggons and the red coaches of Cobb & Co.
were crude makeshifts at best, very wasteful of the time
and endurance of their users. Yet with them men proved
the land and showed what it could produce. In the ’seventies
and ’eighties, British capital, seeing the big markets for
Australian wool, metals and meat, helped to fence and
water the station properties and to link them with the
ports by railways and telegraphs. Served by these, the
flocks increased from 20,980,123 in 1861 to 106,419,751
in 1891, cattle multiplied from 3,846,554 to 11,112,112
in 1891, and the better care and breeding of the sheep
showed in a seven-fold increase of the wool-clip from
784855900 pounds to 54354955800.

Such progress within a single generation could never
have been made with road-transport alone. Neither the
art nor the administrative machinery of road-building
made effective advance. Attempts at construction on
tender virgin soil by half-trained engineers, though they
cost from five to six thousand pounds a mile, ended in
deep mud or flying dust clouds. “It is absurd”, wrote
Governor Hotham, “to go on spending ^{^^500,000 a year

1 Henry Lawson, The Lights of Cobb & Co,

INLAND TRANSPORT 287

in making roads which disappear after a winter’s wear.
This colony, for political as well as for financial reasons,
should borrow money for railways on the security of the
land fund. After Melbourne folk had been tormented
for decades by the dust which the north wind drove in
thick clouds along their broad straight streets, a civil
engineer told them how unsuitable to a dry climate with
boisterous land winds were the water-bound macadamized
roads of Britain. Concrete roads, he explained, though
expensive at first would call for little upkeep and would
minimize the dust nuisance.^ But local governing bodies
equal to the technical and financial tasks of building such
roads were but slowly created. In Victoria, where local
government was most active^ the “shires” received wide
rating powers in 1863, but borrowing powers for boroughs
and shires were not added until 1874. In New South
Wales municipal institutions did not become general until
after 1905. It was the railway age, and the need of good
roads or local road authorities was not felt.

When in the ’fifties the carriage of goods to the gold-fields
normally cost more than the goods themselves when landed
on Sandridge or Williamstown wharves; when consumers
were paying between two and three million pounds per
annum to carriers, as well as heavy charges for police
protection, Victoria had looked a fresh and promising
scene for “associated enterprise” in railway construction.
But it was not enough to prove macadamized roads ex-
pensive, and wages and fodder-prices exorbitant: it did not
follow that, because railway companies had won through
their infant ailments to success in Britain, they would do so
in a new colony. There were far better openings in Australia

^ In a letter to Captain Cole quoted by The i8 October 1862.

* I. Tipping, Suppressing the Dust Muisance (Melbourne 1884). “The inter-
stices of the metal should be filled with a material not liable to softening
in wet nor to blowing out in dry weather. The only known available material
supplying these conditions is Cement Mortar which, after the interstices
have been closed to the utmost by rolling, should be grouted to a depth of
three or four inches.’*

288

INLAND TRANSPORT

for speculators than railways could hope to offer. ^ ‘‘The
colonists have so little disposition to embark their capital
in such undertakings that even with a dividend secured
by a Government guarantee, it has been found wholly
impossible to finance any extensive scheme of railways by
means of local shareholders.” “Railways enterprize does
not offer sufficient temptation for investment to those who
desire to become rapidly rich.” The Melbourne, Mount
Alexander and Murray River Railway Company, pro-
jected in 1852, had received “an extent of encouragement
to which”, thought Captain Andrew Clarke, “the history
of associated enterprize in railways affords no parallel”.
Five thousand pounds was advanced for preliminary ex-
penses. Government guaranteed a dividend of five per
cent, for twenty years on all paid up capital, and granted
free land for the line and stations, including fifty acres for
a Melbour»^ terminus. But by April 1 855 only 5127 shares
of twenty-five pounds had been sold out of 40,000, and,
instead of a line to the goldfields and the Murray, the
great Company had decided to confine its attention to the
line to Williams town, ten miles long. Commissioners on
Internal Communication reported in 1854 that “the
opening up of great lines of railway will be a work of time,
it will cost millions of money and will require a combina-
tion of talent and perseverance, a command of large
resources and an amount of confidence on the part of the
public which are not likely for some time to come to be
the attendants on private colonial undertakings of this
magnitude”.^ In May 1856, the Melbourne, Mount
Alexander and Murray River Railway Company sold out
to the Government for a nominal sum. The Hobson’s Bay
Railway Company and two smaller concerns prospered
on suburban passenger traffic, but only by charging high
fares.

^ Captain Andrew Clarke, R.E. Report on Railways, Vic. P.P. 1856-7,
vol. IV, p. 551-

^ Report of 1854, Commissioners on Internal Communication, Vic, P,P, 1856-7,
vol. IV, p. 801.

INLAND TRANSPORT 289

The record of private or associated enterprise around
Sydney was even more discreditable. The Sydney Railway
Company, after struggling for eight years to raise enough
capital to build a line from Sydney to Parramatta, col-
lapsed and left the uncompleted task to the State. Its
engineers earned eternal infamy for it by involving the
two leading colonies in their disastrous choice of different
gauges.^ Though, in the generation after the convict system
had ceased, political opinion was very hostile to government
action, it was plainly beyond local resources to link the
capitals with the goldfields, or to build lines that would
handle the all-important wool traffic at lower freight-
charges. “The intervention of the authorities of the country
is no longer a matter of expediency but of necessity. ”

Men were not wanting to plan a transport system for
the distant future, with a spacious disregard of cost. One
pamphleteer urged the necessity of a North-South line
from the Gulf country to Melbourne, with an extension
through Queensland to the Northern Territory.^ Another
urged the substitution for rails of great trunk roads on
which rubber-tyred locomotives should run.^ The Lieu-
tenant-Governor of South Australia, Sir Henry Young,
sought to harmonize the use of river and railway transport.
The enlightened nature of his proposals for connecting

^ See Sir G. Grey to Sir C. Fitzroy 8 November 1854 enclosures.
Also T. A. Goghlan, Labour and Industry in Australia y pp. 841-3. The company
begged more capital from the Government than it raised for itself. In a
pamphlet published in 1854, T. S. Mort advocated the issue for its benefit of
government-guaranteed bearer shares. Circulating like bank-notes, these,
he argued, would be a sure means of attracting small savings and thus of
avoiding the need of borrowing abroad and “ the danger of government
taking part in industrial operations”.

* Edwin Trcnerry, Plan for a Grand Central Transcontinental Railway (1879).
It was to be built on the land-grant plan, from Deniliquin to the Gulf,
and linked by branch-lines to Roma, Wagga Wagga and Euston, to join
the Queensland, New South Wales and South Australian railways. “Booligal
would be the Chicago, merchants there having the option of sending to
either one of the ports of Sydney, Victoria or Adelaide.”

* G. E. Dalrymple, India Rubber Tire and Tram Steam Traction (Brisbane
1869), advocating (a) wooden railways or macadamized roads on which
should be run rubber-tired locomotives, and {b) a central means of land
communication through Echuca, Bourke and the Warrego Valley.

s M

290

INLAND TRANSPORT

Sydney, Melbourne and Adelaide was recognized. But
each of the new colonial governments was intent on the
transport needs of its own constituents and inclined to see
these as opposed to those of others rather than as reconcil-
able in a common system.^ A French visitor in 1885, thinking
of the carefully planned railway web of France or Belgium,
was shocked to find no general plan for the railways of
any one colony, still less for those of Australia.*

' A central authority, had it existed, might have planned
a railway system for the pastoral and agricultural areas
with due regard to easy gradients to coastal ports and to
the spacing of the lines in proportion to traffic. The latter
was perhaps the more fundamental task. Though a valu-
able commodity per bale, and thus able to bear the cost
of long land transport, wool is a sparse crop. An acre will
produce at best only some tea pounds in a year. Therefore
the railway^ that collect it into big trainloads for haulage
to the sea may be spaced a hundred miles apart. The wool
could well bear the cost of haulage to the railway, even
by the bullock dray, from stations fifty miles from the line.
The economical network of railways for wool traffic was
a wide-meshed one. The savings possible by rail transport
as compared with road transport were still adequate, after
being shared between the pastoralists and the railways, to
extend greatly the two margins of profitable sheep-running,
its limit in the interior and its degree of capital equipment
and care everywhere. When the fancy prices of the gold-
digging days had gone, two shillings per ton-mile had
remained the ruling charge on the waggons. The freight
for miscellaneous goods over the private railways of the
’fifties was a quarter of this, viz. 6d. per ton-mile.

^ Cf. Lionel Curtis, Letters to the People of India on Responsible Government^
p. 69. “The moment you begin to establish electoral governments, the
boimdaries of their jurisdictions, lightly sketched by the pencils of officials
and diplomats, begin to bite into the political map like acids.” The economic
map, too, if you leave development to elected rulers !

® F. Journet, VAustralie (1885) • T. A, Goghlan, Seven Colonies of Australasia^
1901-2, pp. 843-4, gives a valuable table showing the length of line opened
in each year, 1854-1902.

INLAND TRANSPORT

291

Ideal plans for the railways of Eastern Australia as a
whole were beyond the ken of colonial engineers fighting
to build a railway of any sort into the productive interior.
In New South Wales, after Penrith and Picton had been
reached on the Western and Southern railways, there was
so little traffic that the politicians of the hour thought
of extending them by horse-tramways. It was all that
the engineer-in-chief could do, with the vigorous second-
ing of Governor Sir John Young, to obtain authority to
build for the locomotive, albeit with sharp curves and
gradients. But Sydney, for all her deep, safe harbour
and abundant natural wharfage, is separated from the
wool lands by a rough and sterile area where railway
construction was costly, haulage heavy, and traffic light.
Zig-zags and gradients of one in thirty were needed to
climb the ranges. The cost of such stupendous work — ^for
such it was in proportion to a traffic of forty tons a day
on the main Western line — forced the Government to
meet interest payments out of fresh loans. This lapse into
bad finance, however inevitable, was difficult to recover
from when once made.

Benevolent governments were urged to ignore cost of
service, and to set rates of freight that would develop the
traffic. And freights that were reasonable, even cheap, to
the wool men in comparison with the costs of transport by
bullock teams, were still high to farmers. Free selectors
grumbled that the railway was too dear for them when in
the ’seventies it cost per bushel to send wheat from
Echuca to Melbourne, a haul of only 156 miles. When
agricultural implements were charged £4.. iis, per ton for
the same journey, the farmer jibbed and sent his team to
Melbourne to bring plough or stripper up by road.^ Agri-
cultural settlements made a demand not only for light
freights but also for closer lines. Wheat is by no means com-
parable with wool in value, weight for weight. An acre
under cultivation, however, will produce from ten to twenty
^ J. L. Dow, Our Land Acts (Melbourne 1877).

19-2

292 INLAND TRANSPORT

bushels, weighing over five to ten hundredweight, and as
much as three tons of hay. Such a bulk of produce will
load many more trains but, as the cost of hauling it to the
siding by horse or bullock team mounted rapidly with the
distance from the line, fifteen miles out became the limit
of profitable settlement. This meant that, if settlement by
farmers was to fill in the blank spaces on the railway
map, the mesh of the network had to be reduced to thirty
miles.^

No doubt it would have been wise, had it been feasible,
to wait for the agricultural settlement of the land within
access of the main wool lines before making ready for
the wheat-farmers elsewhere. But in this matter railway
construction, even within each colony, was embarrassed
by the guerilla warfare on the Western front between
squatter and free selector. The wool-growers outbid the
selectors foi^tthe freehold of land well served by the rail-
ways, and soil-exhaustion made farmers restless even
where they did get land. Colonial treasurers, too, were
only too glad to see them given access to virgin land by
the building of more railways. These opened up the
prospect of more land ‘‘revenue”. New South Wales
could rely on a light revenue tariff and do without an
income tax until the middle ’nineties because of the
abundant money received from sales of Crown land.
Twelve millions, mainly from sales, figured as land revenue
between 1876 and 1880.

Yet financial considerations cramped any grand style in
railway-building because low freights in proportion to
cost of service made the railways unproductive of net
revenue. Construction work had to wait upon supplies of
capital borrowed abroad. While the line over the Blue
Mountains was being built, the contractors were warned
not to go too fast, lest the Treasury should run out of funds
with which to meet their claims. The credit of the colonies

^ H. Deane, Presidential Address to the Royal Society of New South Wales ^
1908: “Railways Required for Carriage of Wood and Wheat”.

INLAND TRANSPORT

293

in the London market was a plant of uneven growth. It
flourished well in the ’sixties, and Queensland and Victoria
built railways fast. Then came a check, not unconnected
with continued repudiation of debts in the states of the
American Union and with foolhardy railway contracts in
the Near East.^ ‘‘ It was a favourite maxim of the sixties ”,
notes Coghlan, ‘'that what America had done Australia
would do. ” The parallel did not hold good, however, as re-
gards the forms of security pledged. Taught by bitter experi-
ence, the British investor who lent his capital in America
learned to prefer railway bonds charged on the assets of a
railway company rather than the bonds or debentures of a
state government. In his dealings with Australia he relied
upon government securities The earliest loans to the colo-
nial governments had been raised by the sale of debentures
redeemable out of the land fund. Though in process of
dissipation, the public estates of the various colonies were
very large and tangible assets. Other specific revenues
came under pledge for a time, but an episode in Tasmania
in the ’seventies suggested to colonial railway-users that all
loans for railway construction should be made a charge
on the whole of the borrowing colony’s assets. The lenders
in London were nothing loth to accept the wider security.

A private company had undertaken in 1868 to con-
struct and operate a western railway from Launceston to
Deloraine, the Government guaranteeing interest on the
cost. This was done at the petition of the landowners
along the line who agreed that, in the event of the receipts
failing to cover interest as well as running expenses, the
Government should find the guaranteed interest by levying
a special local rate upon them. The railway receipts proved
too small even to meet running expenses, but when the
Government took over the line and sought to collect from
the landowners a part of the sum they had contracted to
pay, these beneficiaries repudiated their contract. Circum-
stances alter cases, they said. The main railway from

' Leland Jenks, Migration of British Capital to 1875 {1^2^) y passim.

294 INLAND TRANSPORT

Hobart to Launceston had in the meantime been made
a charge on the general revenue. Why, then, should the
western line be an additional local burden? Attempts to
enforce payment of the rate by distraint of their goods
called out a violent resistance. “Griffin’s horse”, an
animal seized for non-payment of the rate, became a
symbol of defiance until in 1872 the Government aban-
doned the plan of local assessment to meet local railway
deficits.

Though Griffin’s horse is now dead and forgotten, its
influence is still potent. For good or ill every project in
Australia involving substantial expense became thereafter
“a public work of national importance”. The high horse
which the otherwise silent member rides when he demands
of ministers a proper recognition of his constituents’ im-
portance is really Griffin’s.

In the s^e decade, all the colonies followed New
Zealand’s lead in the issue of inscribed stock, instead of
debentures chargeable on this or that source of revenue,
and the British Parliament in 1877 provided by a Colonial
Stock Act for inscription and transfer in the United
Kingdom. Though not yet listed as trustee securities^ — a
boon Colonial government agents were already seeking —
colonial stocks were thus made familiar and easily handled
“lines” on the London stock market, the central source of
loanable capital.^

The honest broker who brought together the willing
buyer and the willing seller of colonial securities appeared
in 1872 in the person of Sir Hercules Robinson. As
governor of New South Wales from 1872 to 1879, he
advocated at every opportunity a spirited public works

^ They were not trustee securities until 1900, when Joseph Chamberlain
passed another Colonial Stock Act in their favour. Thereafter, trustees might
legally buy them as, in effect, gilt-edged invcstment.s, and the savings of
the British middle-classes were at the disposal of Australian treasurers.

* Regarding brokerage and other expenses of negotiation, see a despatch
of the Duke of Buckingham to the Officer Administering New South Wales,
23 January 1868, and T. A. Coghlan, Seven Colonies of Australasia^ 1901-2,
pp. 1024 et seq.

INLAND TRANSPORT

295

policy. When he arrived, Australia had less than 1200
miles of railway, and nowhere did a line penetrate more
than 180 miles from the coast. But the engineers had
scaled the mountain barrier behind Sydney. The true
home of the pastoral industry lay before the railheads;
and, both in Victoria and New South Wales, railway men
and private brokers concerted plans for the capture of the
main wool traffic. Sir Hercules was ready to urge a larger
courage on lenders and borrowers alike. Full-bearded
audiences at the opening of railway extensions roared
applause when he told them “this country possesses almost
boundless natural resources which only require population
to develop them”, and went into ecstasies over the moral
he drew, that ministers ought not to be satisfied with the
construction of less than fifty miles of railway in each year.^
Each colony in turn enthusiastically drew up ambitious
plans of railway and other development works, to be
financed by loan monies. From 1871 to 1875, eleven
borrowed millions and a half were found for public
works.

Those who decided what railways were to be built and
what rivers to be bridged tried hard to limit the schedules to
works urgently needed. But what should be taken as the
criterion of urgency? Should it be the ability to meet the
interest on costs of construction? If this criterion had been
abandoned on the roads when the toll-bars were removed,
why should it be applied to the railways? As money grew
cheaper, importunate members mounted Griffin's horse in
turn. Opening up the land ahead of settlement was held
to be the saving grace of Government ownership of the
railways. By the end of fifteen years of easy money and
political pressure, treasurers’ ideas of urgent necessity had
been pushed so far ahead of population and production that
the recurring deficits on the railways troubled even the

^ T. A. Coghlan, Labour and Industry in Australia^ devotes an admirable
chapter to the origins of “vigorous public works policies’*. See pp. 14,05
et seq.

296 INLAND TRANSPORT

optimists.^ Always, however, came the reply that increas-
ing traffic was in sight, and that settlers were about to fill
the vast empty spaces.

Public expenditure of loan funds far exceeded in the
’seventies direct private investment into Australia. Between
1871 and 1875 only a million and a half of private capital
came to augment the 33 millions already so invested.
Between 1876 and 1880, however, depression ruled in
Europe, and with it low rates of interest. Investors at
home were increasingly ready to put their money into
land companies and other private Australian ventures.
During that quinquennium 1,600,000 came privately to
Australia in addition to the ^^22, 000,000 borrowed by
governments. New South Wales, Victoria, Queensland
and South Australia each took five millions on govern-
ment account. So far, so good. In the decade 1871 to
1880 inclusivj^ 2681 miles of railway were built, and the
length of line open to traffic was almost quadrupled. By
1881, telegraph lines, erected mainly during the ’seventies,
crossed 25,604 miles of country. The stimulus to wool
production was proved by the expansion of the wool-
clip from 211,413,000 pounds in the grease (1871) to
324,286,000 pounds (1881). The totals of shipping entered
and cleared at Australian ports, 3,690,000 tons in 1871
and 8,1 10,000 tons ten years later, were equally significant
of expanding trade.

Sir Hercules Robinson had urged that the “true policy”
of a young country was “ to loosen every band that hampers
industry, so as to lessen the cost of production, to extend
your markets, and by making the country year by year
a cheaper and cheaper place for working men to live in,
to attract them in numbers to your shore”. The leaders
in each colony heard with prophetic ear the tramp of
millions who would soon people Australia. Population
was growing at a phenomenal speed. From 1,647,756 in

' Correspondence between the Minister of Railways and the Railways
Commissioners, Victorian P.P. i8gi, ch. xvi.

INLAND TRANSPORT

297

1870 it had risen to nearly two and a quarter millions in
1880, an increase of 35*4 per cent, in a decade, and even
this was exceeded in the ’eighties.^ If any among the
leaders had paused in providing railways, wharves, and
water supplies for the oncoming hosts, the days of his
leadership would at once have ended.

As is usual when a new expedient of economic progress
is first tested commercially, practical men saw only its
merits, and speculative financiers egged them on. Pas-
toralists, putting back into the purchase of freehold land
almost the whole of their profits and a big share of the
new capital that banks and land companies were bringing
in, over-capitalized their runs, and then over-stocked them
in the effort to reduce their indebtedness. A lucky run
of seasons lured them out of their depth. Colonial govern-
ments built railways for wheat-farmers who had not yet
solved the problem of permanent agriculture. The invest-
ing public, both in Britain and Australia, little suspecting
these defects and growing foolhardy in land and mining
speculation, lost all regard for the practicable. Then an
economic winter came to check the general exuberance
and to initiate a more varied and more competent use
of the land and its railways.

^ The increase from 1880 to 1890 was 41 2 per cent.

CHAPTER XVII

The Land Boom

NO community lacks would-be leaders who confuse
city-streets, railway mileage and tall chimneys with
civilization, who mistake speculation for prosperity
and money-grabbing for the good life. Perhaps it was
inevitable that such men should dominate Victoria a gen-
eration after the gold-rushes. They had dreamed of and
achieved the transformation of so many “canvas towns
into cities that it had become a part of their character to
look at finance and government with contractors’ eyes.
“The whole real business of Australia is to construct and
strengthen the material frame upon which its future great-
ness will depend.” So Melbourne was telling the world^
on the very eve of its fall from the financial leadership of
Australia. But a material frame, however strongly con-
structed, does not ensure the progress of an economic system.
Government is finance, and the major part of sound finance
consists, not in amassing money, so much as in directing a
country’s commerce so that its industries incessantly reshape
themselves to consumers’ needs, as consumers express them
in market prices at home and abroad.

The banks which had discounted the bills of merchants
and squatters at the capital-ports in pastoral days had a
sharp lesson in the danger of short cuts to fortune by land-
speculation, when the Bank of Australia and the Port
Phillip Bank failed during the “Bad Times”. During the
’fifties, however, ten millions’ worth of gold flowed each

‘ Through Miss Flora Shaw, The Tims special correspondent, March

>893-

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299

year out of the up-country gullies. Banks old and new
pushed branches into the mining areas to buy gold outright
or to act as agents in transferring it overseas. The new
banks had not bought the experience of the ‘^Bad Times”.
The London Chartered Bank of Australia, the Bank of
Victoria, the English, Scottish and Australian Chartered
Bank, the Colonial Bank of Australasia and the National
Bank of Australasia were all founded in the ’fifties, and
the Commercial Bank of Australia in 1 866. Large profits,
easily made in the digging days, multiplied branches in
pursuit of a fluctuating business. Easy money bred an
incautious zeal to lend.

In pre-gold days, the Colonial Office had coached
colonial legislators in banking principles as understood
in London. A despatch by W. E. Gladstone to Sir Charles
Fitzroy had stated the limits which should be set on the deal-
ings of banks by any laws submitted for the royal assent.^
These would have precluded banks from advancing money
on lands or houses or ships, or on pledge of merchandise,
from holding lands or houses save for the transaction of
their own business, and from engaging in trade, save as
dealers in bullion and in bills of exchange. Banking, as
London understood it, was an advance of rights to draw
ready money from the “bank” or consolidated purse of the
shareholders and depositors, given on the security of a
right to a little more money at a future date. The commer-
cial bill of exchange, signed by at least two solvent traders,
was the ideal form of security because it represented staple
raw materials on their way to market. In the worst times,
such bills turn themselves into cash by the sale of the goods.
For men must cat and be clothed even when merchant-
bankers fail, stock-exchanges close their doors and land
is “cheap as stinking mackerel”. The rule favouring such
bills is ideal, too, in keeping to the fore the banks’ best
service to society. To the extent that they enforce repay-

^ W. E. Gladstone to Sir Charles Fitzroy, 30 May 1846, H,R, of A,
series i, vol. xxv, pp. 74-5.

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300

merit of such advances, banks remind traders of their duty
to meet the market’s ‘‘bread-and-butter” demands.

When, however, the volume of Australian production
changed back from the bullion in which, as raw cash, they
might deal, to the “ sheep and wool, cattle, hides and horns ”
in which they might not deal, colonial bankers felt this
orthodoxy of bill-discounting to be a field too narrow for
the employment of their abundant gold-reserves. Colonial
legislators, mainly consisting of merchants and squatters,
had already exacted from their Mentors at home per-
mission for banks to make advances on wool and stock
while still in the pastoralists’ hands. Towards the end
of the ’sixties, the banks took a further step. They dis-
pensed with the bill of exchange drawn on a London
merchant-broker when financing pastoralists whose wool
was on the way to the sales. “The legislature”, argued a
prominent ^nker, “has encouraged bankers by special
enactment to advance money to squatters on their current
clips of wool. Surely the advance is as safe when repre-
sented by a bill of lading and policy of insurance as when
on the backs of the sheep?

If, however, advances on wool and sheep were sound,
why not advances on land? Every squatter was eager to
borrow enough capital to buy his freehold and thus save his
run from free selectors. The way was made easy for the banks
when in 1870 the courts and the Privy Council decided
that a bank might acquire, hold and pass a good title to
land or other property which fell into its possession as the
collateral security of an advance, even though that acqui-
sition were in violation of the bank charter.^ Bankers
might persuade themselves that they had little choice but
to make such advances against land. How else could they

1 Adam Burnes, General Manager of the Colonial Bank, in a controversy
with James McBain, a director who had resigned rather than countenance
the innovation. See Innovations in Colonial Banking Practice, by G. M. S.
(Sydney 1869) (Mitchell Library Pamphlets).

® See Ayers z;. S. A. Banking Go., 3 P.C. and National Bank v. Cherry,
3 P.C. (1870), p. 548.

THE LAND BOOM

301

prevent the ruin of the industry that grew the golden
fleece? Yet such advances were bound to be based on
speculative values. Repayment depended on expectations
of production coming true, and values holding in years to
come, not on goods already produced and made the basis
of short-term commercial bills. Inevitably, advances on
land were long-term credits that locked up the banks’
resources and thus lessened the power of the community
to adjust itself to changed circumstances. Nor did the
banks long confine the practice to pastoral lands. As the
greater pastoralists paid off mortgages, or transferred them
to the finance and mortgage companies which were ready
to share in this business, competition for openings in
which to lay out loanable funds led banks to make ad-
vances against the title-deeds of farmers, small graziers
and others, ‘‘This class of advances”, wrote an active
Victorian banker in 1880, “has acquired an importance
to which what the conservative banker still calls
legitimate banking business bears a very diminutive
relation.”^

Two-thirds of the total advances were “outside the
current discounts”, he estimated; yet the results to bank-
shareholders fully condoned, in his opinion, this departure
from English practice— “unless it could be shown to be
fraught with some latent danger requiring only a hitherto

1 H. Gyles Turner, of the Commercial Bank of Australia, “Victorian
Banking considered in relation to National Development”, Australian In-
surance and Banking Record, 8 December 1880.

According to its prospectus, The Commercial Bank of Australia Limited,
Melbourne 1866, was “projected especially for the purpose of affording
banking accommodation to large and important classes whose claims for
assistance entitle them to a much larger share of credit than has hitherto
been afforded by the existing banking institutions, viz. the manufacturers,
small traders, farmers, vignerons and other producers”. This drew from
Syme a typical diatribe in The Age against the “foreign banks”. “We send
away to be expended amongst strangers an annual aggregate amount of
profit which would suffice for the capital of one new bank per annum. . . .
The Commercial Bank of Australia aims at being the first of the series. ... It
will possess all the privileges of the incorporated Banks without the restric-
tions which harass them.” The Argus also welcomed, in its more urbane style,
advances to small producers on the security of title-deeds.

302 THE LAND BOOM

undiscovered combination of circumstances to develop”.
Nemesis had whispered as he wrote.

Bankers and colonial publicists generally were agreed
in scouting any real possibility of danger. Banking, like
wool-growing and everything else, had to be adapted to
Australian circumstances. Land values in a young country
rose so inevitably, it was said, that a wide margin was
assured and the banks' money was abundantly safe.
Transfer under the Torrens system was so easy that a
clean certificate of title was as negotiable a security as
government stock or a first-class trade bill. ‘‘At the worst
the land remained.” Gyles Turner smugly ascribed
Australia's freedom from the bank disasters so frequent
in Britain to “the soundness of judgment and moderation
of aim” of the colonial bankers.

Cautious men wondered. London bankers knew well
that the yi^d of gold from California and Australia
was falling, and that monetary demands for the metal,
especially for the new German Empire, were looming
large. ^ The value of gold was sure to rise and therefore
the general level of prices would fall, more goods being
needed to obtain a unit of gold. Australian exports, they
noted, had escaped the first impact of this fall in prices,
being necessaries of life. Perhaps more thorough occupa-
tion of the back country would enable the pastoralists to
maintain their incomes on a falling wool market, but
such increase of supplies “might become a prospective
danger if too largely relied on by the producers”. Even
the most optimistic saw a risk of over-capitalization through
the pushing in of more British capital by finance companies,
and conceded that competing bank branches in the
country towns made for excessive lending.^

^ W. Purdy, The City Life (1876), p. ii. This little book is the more
significant because its author had an intimate experience of Australian
banking and finance.

* In 1880, England and Wales, according to Gyles Turner, loc. cit., had
a banking office for every 1 1,810 persons, Scotland had one for every 4031,
and Victoria had one for every 2760.

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303

For a time all continued well with Australian finance.
Artesian water assured the occupation of wide areas of
mulga country inland, and a long run of favourable seasons
flattered the hopes of continuous progress that are in the
hearts of every generation, but never come true. Men
smiled at the thought of financial crisis in a land which
exported gold in bulk, and where bank-reserves were
normally equal to half the total of notes circulating and
deposits at call. In 1866, it was said, a New South Wales
Treasurer, Geoffrey Eager, had proposed a national bank
of issue, but had planned no more than a branch of the
Treasury printing paper money for government. In the
remote contingency of a panic such an issue might have
afforded the aid of legal tui Jer notes wherewith to satisfy
the scared, but it carried the danger of political money,
local depreciation and dislocated exchanges. Such risks,
and the threatened loss of their own convenient note-
issues, led the banks to oppose Eager’s plan and all later
plans for an emergency issue. Colonial banks went on
competing for public favour, and David Syme ap-
proved.

Australia in the early ^eighties certainly presented a
strong contrast with Britain, in prospects as well as in
banking methods. The price of wool was steady. The area
under crop had increased in the previous decade from
2,143,709 acres to 4,560,991, The problem of sending
surplus meat to Europe had been solved by the refrigerating
engine. Good seasons had followed one another as though
droughts were no more. It seemed, too, a world where
the speculator might still “strike it rich”. At Mount
Morgan in Queensland a veritable hill of gold was found
in 1882. It was known to contain millions of ounces of
the metal.^ A year later, another of silver, lead and zinc
was found near the South Australian border of New South

^ Up to its closing in September 1925, the Mount Morgan Mine treated
9,196,605 tons of ore, containing 5,305,979 oz. of gold and 139,427 tons of
copper. It had paid £’9»379>^6^ in dividends. See its Annual Reports,
1886-1925, and Rees Jones’ Gold-Mining in Central Queensland (1913).

304 THE LAND BOOM

Wales.^ Australia was still the speculator’s El Dorado. The
gold yield, it was true, had fallen to half what it had been
in 1 86 1, but the world wanted gold so much that each
ounce bought more imports, and, as costs fell, mining
prospects bettered.®

So, too, with the other staple industries. Manufactures
overseas fell more rapidly in value after 1873 than did raw
materials. Competing industrialists in Britain and Ger-
many cut their prices, and for a time sold at finer margins
rather than lose their footing in the world’s market. For
the time being, colonial populations bartered their goods
for those of Europe at an increasing advantage.

British investors seeking this attractive distant field paid
attention first to New South Wales and the main pastoral
industry. Private investment in Australia between 1876
and 1880 amounted to 1,600,000, and of these some
eight milliop^ went into the mother colony as deposits or
share-capital for banks or land and finance companies.
There all financial channels led to the stations. With the
new money, squatters bought, fenced, watered and im-
proved their runs. Their purchases swelled the govern-
ment revenues from land. Improvements and added pro-
duction kept the railways busy. New South Wales treated
£ 1 2,000,000 from land sales and rentals as revenue during
that quinquennium. Victoria drew an abundant customs
revenue from an equally temporary source. To transfer to
its Melbourne Treasury the money it borrowed in London
over and above interest due there, the Victorian Govern-
ment or its bankers sold drafts on London to Melbourne
merchants wishing to pay in Britain for imports thence.
Such liberal offers of money-in-London, and the certainty

* Up to 1 924 the value of Broken Hill’s mineral output was 1 2 1 millions
sterling, the dividends paid by the various companies having totalled nearly
£28,000,000. Thirty-four million tons of ore had been extracted. See the
Annual Reports of the Broken Hill Proprietary Co. from 1885 (Adelaide Public
Library).

• See T. A. Coghlan, Seven Colonies of Australasia (1902), p. 944 for the
gold yields per annum from 1851 to 1901.

THE LAND BOOM

305

that the local money they gave for it would quickly be
set spinning again in Victoria as loan expenditure, greatly
heartened importers. On their big imports the Govern-
ment collected the usual duties. Active borrowing thus
lent an appearance of abundant strength to the colony’s
public budget. This in turn was the justification of more
borrowing to meet growing public needs. “Development”
was the blessed word, and between 1881 and 1885 British
investors lent at low rates of interest thirty-seven and a
half millions to the four larger colonies. Privately, it is
estimated, they put thirty millions more into Australia.

Colonial Premiers and Treasurers felt much concern
over the responsibility of spending wisely their share of
this money. In a young country with centralized habits
of development, log-rolling for the favour of a fine in the
loan estimates wzis inevitable. The first Victorian Parlia-
ment brought it on itself when it approved of railway
construction by Government on the ground that Govern-
ment was best qualified to decide in what directions
settlement should be promoted. But after thirty years
Parhament was not so sure of that. To a legislature
sick of the scandals associated with railways and public
works during the O’Loghlen-Bent regime, the Service-
Berry ministry proposed that decisions about new con-
struction should be delegated to experts. Parliament
heartily agreed. Richard Speight, from the staff of the
English Midland Railway Company, was given a high salary
to preside over a Railway Commission of three. They were
appointed for seven years and were instructed to work the
Victorian railways at a profit, but at the lowest fares and
freights consistent with a profit, and with development.

The measure establishing the Railway Commission did
rot give the new experts a free hand in making the rates
It which goods and passengers would be carried. The
Commissioners could only alter the by-laws and regulations
ixing fares and general rates of traffic if the Ministry of
he day concurred. Public opinion in a democratic colony

S H

THE LAND BOOM

306

would not tolerate on publicly owned railways the ap-
parent favouritism of ‘‘charging what the traffic will
bear” when this took the form of specially low freights
to particular stations. On the other hand, in the name of
Development, public opinion did demand low freights that
would build up the traffic on all lines. In the long run
little is gained by the benevolence which government
railways have been required to show in charging freights
and fares lower than those needed to balance the railway
budget. Duncan Gillies claimed that the state had always
in view a higher object than profit, viz., to enable country
settlers to market their produce at reasonable cost.
“Reasonable” rates, however, mean that in years of lean
traffic the Treasurer must meet the railway deficit out of
consolidated revenue or fund it, and years of deficit
proved far more frequent in Victoria than years of pros-
perous d^?v^elopment. By the end of the century, the
Victorian railways had accumulated losses of nine mil-
lions. And as a government cannot write off its losses of
capital which it owes mainly to external investors, bene-
volence to country settlers resulted in dead- weight burdens
on the general budget. The full cost of railway transport
must be paid, either by the class served, by the taxpayers
at the time, or at compound interest by posterity. To spread
the cost over a long period in the name of constructive
benevolence is to dull the instrument of financial criticism
by which a well-ordered community locates and analyses
its weak services. Worse still, it may tempt posterity to
the all-shattering risk of repudiation.

Speight and his colleagues, though they were prevented
from rate-making along constructive lines, and were not
altogether free in matters of personnel, did manage to
break the long series of railway deficits, mainly by limiting
political interference in the engagement of employees. Yet
their success was not a clear gain. Log-rolling about new
construction only shifted from the lobbies of Parliament
House to the corridors of the Commissioners' Office at

THE LAND BOOM

307

the opposite end of the city. And the railway surplus
was too well boomed as evidence of the colony’s ability
to absorb more British loans for railway-building.

Sir Henry Parkes in 1887 adopted a better plan
to place the New South Wales railways above the
pettifogging “local members”. Not content with the
form of independent management by a Commission, he
made it a reality by becoming the parliamentary spokes-
man of the Commissioners and defending their inde-
pendence even against his colleagues in the ministry. This
won for them power to shape the book of rates on lines
nearer to sound railway practice. Contrary to the Vic-
torian plan, he refused to load his Commissioners with
decisions about new lines. He foresaw the disrepute into
which their helplessness to withstand the politicians was
to lead Speight and his colleagues, and set up a standing
committee of both Houses to deliberate on all works in-
volving a cost of more than ^(^20,000. By this means,
reminiscent of private bill procedure at Westminster, he
used publicity and delay to check the insidious log-roller,
but left on cabinet and Parliament the ultimate responsi-
bility for the spending of public money. ^

Possibly such well-meant policies encouraged home in-
vestors in their taste for Australian securities. In the
period 1886-1890 their lending certainly placed another
hundred millions at the colonists’ disposal, through public
and private channels.^

But by this time drought had returned. Only Victoria
escaped its ravages, and the population there, which
numbered a million souls for the first time in 1887, was
given the disposal of half the plethora of loaned money.
In South Australia, where the drought was most pro-
longed, it brought to light dishonest speculation in pastoral

^ Regarding log-rollers and their ways, see JSf.S.W, ParL Deb. 1887-8,
p. 805, an account by William Lyne, a recognized authority on the
matter.

* Gf. H. Gyles Turner, History of the Colony of Victoria^ vol. 11, p. 296, and
T. A. Coghlan, Labour and Industry in Australia^ p. 1633.

20-2

THE LAND BOOM

308

land by managing officials of the Commercial Bank of
South Australia. The Bank suspended payment in February
1886. Almost simultaneously wool dropped in price to
gjrf. a pound from the i<2\d. which had ruled for a full
decade. Apprehension damped down incipient land-booms
in the cities and suburbs of Sydney and Adelaide, but not
in Melbourne, then the financial centre of Australia. The
countryside was flourishing; the city was agog with excite-
ment over Mount Morgan and Broken Hill mining shares.
What was this talk of a scarcity of the precious metals and
falling prices? Who could doubt the ability of debtors to
meet their future obligations in a country of unlimited
potentialities?

Bank advances of all kinds had reached a total of 58J
millions in 1880. By 1891 the banks had on balance lent
another 73I millions and the total of advances was 132
millions. ?tustralian deposits, however, had only grown
from 62 1 millions to 93 millions. The extra loanable funds
had been obtained by accepting, or rather, canvassing for
British money on fixed deposit for one, two or three years.
Before 1880 such deposits had been rare. By 1891 Aus-
tralian banks held just under 40 millions of them. In-
sidiously, too, the drought had stopped the repayment of
pastoralists’ overdrafts, and low wool-values threatened to
cause their growth. Banks and finance companies looked
to quick profits in the city of Melbourne to provide them
with dividends. Gyles Turner’s criterion of sound banking
would perhaps justify this business too. For a time ad-
vances on city land and on stocks and shares showed
amazing profits. Wool prices, too, rallied in 1887, and
Melbourne financiers ignored the changing equation of
trade and the mortgage over their gold reserves which
their acceptance of overseas deposits had given to British
investors. Millions of borrowed money were profit-hunting
in their city, and an inexperienced generation of land-
banks played without scruple the exciting game of un-
limited gambling on land-values.

THE LAND BOOM

309

Several factors helped on the land boom. During the
’seventies, a rise of wages had started in the pastoral in-
dustry of New South Wales under the stimuli of lessened
transport costs, heavy expenditure on fencing and dam
sinking, and good prices for wool and stock. Then in the
’eighties, Melbourne had to be rebuilt on lines in keeping
with her wealth. As the phase of prosperity and capital
improvement passed in New South Wales, workers poured
into Melbourne. The net immigration to Victoria for
1886 was 18,007, 1887 some 14,721 and for 1888 no

less than 35,385. The spending of loan money on railways
and other public works maintained and increased the
level of wages. A strong demand arose for suburban
houses on time-payment. Building societies purchased and
subdivided suburban estates. The building trades could not
get enough labour, and wages went on rising. To the end
of 1887 banks financed building by advances against title
deeds. At last they saw that speculation had pushed land
values too high. ‘‘What goes up must come down.” They
refused further advances on real estate. Thereupon, building
societies bid against them for local deposits and followed
them to England in canvassing for more. Nor did the
societies care about such elementary precautions as dove-
tailing their obligations to repay depositors into their
clients’ contracts and probable abilities to repay them.^
“At the worst the land remained.”

The bubble reached its iridescence in 1888, the
centenary of Australia’s colonization. Its most sensational
phases were the speculative dealings of the big men in city
land and in mining and “investment” shares. During a
phase of depression in 1879, patriotic citizens of “ marvellous
Melbourne” had been encouraged to plot the curve of its
future progress by an article in the Melbourne Review from
the pen of David Syme himself ^ His authentic figures of

^ Gf. T. A. Goghlan, Labour and Industry in Australia, pp. 1680 et seq.

^ “The Increment in the Value of Land in Melbourne**, Melbourne
Review, vol. iv, pp. 221 et seq.

THE LAND BOOM

310

the increase in city land-values, though intended as argu-
ments for more taxation, were interpreted as a prophecy
of continued expansion. Syme predicted explicitly that
“country land, which is at a low price now (1879) owing
to the extraordinary facilities which exist for acquiring
it, will go up with a bound as soon as there is the slightest
check to the supply, which will be long before the last
acre has passed into private hands’’. As the country
prospered, men argued, the city to and from which all its
business radiated must grow in equal measure. The City
of Melbourne had an area of 410 acres, and when, during
the ’eighties, millions of money were seeking investment
in Victoria, and millions more were being spent close to
Melbourne on railway construction, new wharves and a
cable-tramway system, David Syme’s prophetic vision was
held to have been abundantly justified. After 1884 prices
paid for cify land became prophetic too. They had lost
any link with the rentals that could be paid for the present
use of the land. Early in the boom, James Mirams caused
general astonishment by giving ;^7oo a foot for a block
at the corner of Elizabeth and Collins Streets. During its
height the same land was sold to the Equitable Insurance
Company for £2^00 a foot. “In 1887 you could not have
bought a property in Collins Street at any price without
being hunted next day by someone offering you a profit
on your bargain.”^

The activity on the Stock Exchange, started by the
scramble for Broken Hill and Mount Morgan shares and
by more dubious operations in land companies’ scrip, may
be gauged by the volume of cheques and bills passing
through the clearing house. This rose from ;^3,6oo,ooo a
week in 1887 to almost 000,000 a week in 1888. In the
early months of the year, brokers’ offices were working all
night to cope with the business in silver-mining shares.
Broken Hill Proprietary shares, which were at 176 when

^ H. Gyles Turner, The Australian Insurance and Banking Record^ October
1896, pp. 731 et seq.

THE LAND BOOM

311

the year opened, reached ^(^397 in March. They fell back
to £240 after Easter, but the mine was a wonderful
producer, and though the ‘‘bears” might check excessive
optimism, its output justified high prices. It is impossible,
however, to “bear” a land boom by selling f.a.q. land
for future delivery. Land is too individual a commodity
for sale by grade or description. Buyers would contract
to pay any price for city land because nobody intended
to pay for his purchase in full until he had re-sold at a
higher figure.

As the town population grew dubious of the prices they
were asked to pay and wary of risking their past gains,
“ booms ters” sought in the provincial cities and country
towns for fresh counters in the game.^

The banks had started this wonderful game when, about
1881, they allowed city land as security for considerable
advances. Their old business of lending on pastoral land
had become cramped by new land and mortgage com-
panies. But before a decade was out, they were puzzled
by the problem of stopping the inflation of city values.
When at the close of 1887 they refused further advances
on land, the ball was in play and they merely left the field.
Others played on and the crowd still cheered. British
money was eagerly seeking investment in Australia, and
the decline in pastoral prospects piled up deposits unused.
A disagreement among the Associated Banks ^ postponed
a raising of the rates of interest for fixed deposits which
was intended to retain the surplus in their keeping and
to prevent its misuse by others. An amendment of the
Victorian Banking Act (1864), passed in 1887 and assented
to a year later, removed any legal doubts that “any in-
corporated banking company” might “advance money

1 The writer was interrupted at this point (in August 1929) by an
emissary of a Melbourne land firm, seeking to sell him a block of land in
a riverside suburb of Perth, Western Australia, within sight of his study
windows.

® The larger banks which were associated in handling the Government
account.

THE LAND BOOM

31a

on land, houses, ships and merchandise”.^ The land com-
panies thereupon stepped into the place vacated by the
Associated Banks, assumed the style and title of banks,
and by a competitive canvass for deposits prolonged the
land boom for two years after its insanity had become
common knowledge in Australia.® While the London rate
of interest was low — this was the period of Goschen’s
conversion of Consols to af per cent. — the land-banks
decked themselves with London Boards, on which ex-
Governors, ex-Premiers and Agents-General contrived to
look reassuring to British depositors, while substantial
commissions for their collections enlisted the good offices
of English and Scots lawyers.

The money market hardened in 1889. The land-banks
went gaily on, giving five per cent, for money at call in
Australia. No scruples troubled or cramped their use of
money. Th^ lent to speculative builders up to the full
“estimated value” of their buildings and land. They ad-
vanced money to purchasers on the security of land they
had themselves “sold”. They declared dividends out of
profits calculated by assuming all the land subdivided to
have become worth the prices paid or promised for a few
blocks. “Free conveyances carried people to the sales,
champagne lunches gave them courage to bid, and extra-
ordinary terms of credit reconciled them to their pur-
chases. For any whose eyes still saw, the bubbles had
all burst when on December 20, 1889 the Premier Per-
manent Building Association of Melbourne suspended
payment. Liquidation showed up the most irresponsible
management. Yet for nearly three years more the
borrowing from Britain continued, on both private and
public account. The Associated Banks trembled to assist

^ T. A. Coghlan, Labour and Industry in Australia, p. 1694, states that this
relaxation did not become law although recommended by a Commission
on Banking. It was enacted as section 6 in Vic. Statute No. 1002.

* Cf. The Age and The Insurance and Banking Record on the failure of the
Premier Building Association in December 1889.

* T. A. Coghlan, Labour and Industry in Australia, p. 1693.

THE LAND BOOM

313

the land-banks and building societies. Land was fast
becoming unsaleable. Thousands of houses built at boom
costs were being left without tenants. Emigration from
Victoria started in 1891-2. These cancerous growths”,
as the London Economist^ called the land-banks, had no
realizable assets whatever to set against huge liabilities.
Barings failed in London. Wool prices slumped lower and
lower, to 9(/. a pound in 1890, 8rf. in 1891 and 7!^/. in
1892. Strikes stopped trade and industry on an unpre-
cedented scale. The game was up ; the whole fabric of
Australian credit shook.

The optimists still ruled, however. Parliament was their
last refuge. The outstanding fact that Australia had re-
ceived between 1880 and 1890 more British capital than
she could use in producing wealth did not deter the colonial
governments. They tried busily to paper over the cracks
by raising more loans. The Gillies-Deakin Government
in Victoria spent ;^4, 400,000 in 1889 on public works and
another ;^5, 000,000 in 1890. In 1891 the Munro Govern-
ment was only stopped by London’s reluctance to find
more money, even at higher rates of interest. In April,
Munro wanted another ^(^3, 000, 000, but the public only
subscribed 800, 000. When Barings trembled in Novem-
ber 1890, William Westgarth & Company, a small house
which held large amounts of recent Victorian issues, fell
headlong, and the sale of its holdings lowered the price
of all Australian stocks. Queensland, whose public debt
had been swollen by ^16,212,000 during the decade i88i
to 1890, mainly by London flotations, sought in May of
1891 a further ;^2,500,ooo at The public offered only
p(^300,000, and the remainder could only be sold to banks
and financial houses at New South Wales, though
provided with abundant money by the sale of public
lands, had added ^'36, 000,000 to her debt by borrowing
in Sydney and London between 1881 and 1890. The
vicious circle of government deposits of land revenues,

^ The Economist^ I2 September 1891.

THE LAND BOOM

314

and bank advances out of these to private clients for the
purchase of more land had, as in 1841-3, produced a
furious boom, but drought in 1884-5 and again in 1888
saved Sydney from the worst excesses of Melbourne. She
had not become a magnet for her neighbours’ workpeople.
Failure of land companies and building societies did, how-
ever, spread unemployment there, and in September of
tfSgi her Treasurer sought a fresh loan of ^(^4, 500,000 in
London. He could obtain only £2,500,000, and at the
close of the year his successor was seeking with poor suc-
cess to sell there Treasury bills which he was unable to
place in Sydney. South Australia, whence population and
capital had for a time flowed to Melbourne, decided in
February of 1891 to meet increasing unemployment by
public works, and sought a loan of a million and a quarter
in London. Only a third was subscribed, and though the
balance W^ obtained, the loan was the last of South
Australia’s external borrowings for the century.

The revelations of fraud which came with the crash of
each land-bank, and London’s discovery of similar doings
in the similar country of Argentina, created a critical at-
mosphere. More decisive in sapping Australian credit was
the falling value of staple colonial products. The increase
of their flocks and herds in the early ’nineties brought little
power to station-owners to pay their interest and repay
bank advances. Wool fell in 1893 to a pound and
bullocks which had been worth £5 a head in 1884 to
£2. lOJ. Land, after all, was not such a good basis to
bank upon. Mining shares were not much better. Copper
from Yorke’s Peninsula (S.A.), worth £^/\. a ton in 1873
and ^59 in 1884, down to ;^44 in 1886. A ring of
European speculators had lifted it to £q^ in September
1888, but they burned their fingers and the price was down
to ;C35 S' ton in March 1889, from which it recovered with
painful slowness. Silver had been at 4^. 3W. an ounce
when Charles Rasp, a station-hand, found Broken Hill
in 1883. iSSgit was down to 3 j*. 5 Jfl?. Then the American
and Indian mints closed to its free coinage and its value

THE LAND BOOM 315

fell to 2J. ii\d. in 1893. The new prices afforded scanty
prospects of meeting old commitments. When the net
profit to be made in the primary industries threatened to
disappear, losses had to be cut, costs reduced and capital
values calculated afresh. In his struggle to pay interest
and reduce his overdraft, many a pastoralist, with the
rabbits’ aid, ruined his tender out-back country by over-
stocking, and further depressed an already weak market
by bringing to it a bigger clip. After 1889, stations came in
large numbers into the possession of the banks. New men
had to be found, or old owners employed in new capacities,
to manage re-valued properties on costs consistent with
lower prices.

The bankers and public financiers of Australia had
failed in their main duty. They had forgotten, if indeed
they had ever realized, that an economy, to be sound, must
maintain in equipoise its material equipment and the
production this exists to aid, that capital values have no
meaning apart from actual net income. Income is by no
means a hardy annual “aye growing” while financiers
sit tight. The borrowed funds for which too many banks
strove to find room had inflated the capital values against
which, very dangerously, Australian bankers thought it
good business to lend. Much had been consumed in
extravagant living. Receipts from sales of land, easy
customs revenue on luxury imports, still easier bor-
rowings abroad had made governments as reckless em-
ployers as the land-booming builders. Then prices and
employment on high wages sagged together. Public em-
ployment vanished. On the rank and file of private
employers in the export industries fell the thankless task
of reshaping their expenses in harmony with the world’s
markets. Their calling was to maintain production. They
could not do so at wages which gave labour a share
calculated on the vanished values of the joint product.
But at this point, a new intercolonial federation of trade
unions sharply challenged the right of employers, even of
federated employers, to dictate labour’s share.

CHAPTER XVIII

Labour Shows Fight

AS there were wicket-keepers before Blackham, so there

ZA were labour unions before the gold discoveries.
A Convict artisans and labourers had, without unions
and through sheer scarcity of man-power, even enjoyed an
active government’s pay and conditions when Macquarie
was building to Green way’s plans, ^ though not for long.
‘‘The loose and easy times of Macquarie gave way to
theories of adamant.” The convicts, scattered and weak
in bargainiag against the squatters, were downtrodden
as shepherds and hut-keepers. Expiree mechanics about
Sydney, though burning with resentment for past wrongs
in Britain and Ireland and in the colony itself, had not
the quality of mutual loyalty. The system had broken them.
Its centralization and brutality had killed initiative in its
human tools. Hence the first essays in labour organization
“centre round the more arresting figures of the newly
arrived immigrant. What the emancipist lacked in direc-
tion and management the emigrant who had braved so
great dangers was able to supply. Movement, direction
and decision were his contributions, but the peculiar form
and colour had long ago been set in convict moulds”.^

^ SeeL. M. Thomas, “ The Development of the Labour Movement 1788-
1848”, an unpublished work in the Fisher Library, Sydney University,
P* 10: “The convict labourer combined the functions of serf and freeman
within a curious economic frame. . .Government regulation (of wages etc.)
proved ineffective because of the scarcity of labour. A natural monopoly
exacted its own price of regular hours, government tasks and a wage
system*’.

* L. M. Thomas, op, cit. p. 15. Gf. p. 13: “For the germ of the labour
movement we do not look to the freeman but to the government convict,
particularly to the mechanic with his regular hours, his definite wages and
his economic worth’*.

LABOUR SHOWS FIGHT

317

Of the unions and benefit-societies formed in the ’thirties
and ’forties, whose records Miss Thomas has faithfully
conned, some may have had a continuous life into the golden
age. They, and the post-gold societies of typographers,
cabinet-makers, shipwrights and engineers, were all copies,
and some were offshoots, of British craft-unions.^ The first
Australian branch of the Amalgamated Society of En-
gineers was formed in 1852 on the good ship ‘Frances
Walker’, outward bound. But as long as dreams came
true and men escaped to independence through luck at
the diggings or success with a free selection, wages neces-
sarily ruled high. Unions might swell into prominence
in resisting the importation of Chinese labour, in concerting
a demand for an eight hours day or in resisting some
daring oppression by employers.^ When the aim of the
moment was achieved they would dwindle again into
“aristocracies of labour” concerned mainly with sickness
and accident benefits to their members in the capital
towns. In relatively few trades was there a sufficiently
stable body of fellow-crafts to maintain continuity.

When capital reorganized mining on a wage-earning
basis, a unionism native to the country began to stir. The
transition form appeared successively on the Newcastle
coalfield in New South Wales and in the consolidated gold
mines around Bendigo and Ballarat. The Hunter River
District® Miners Mutual Protective Association was formed
in 1861. A sliding scale of wages varying with the price of
coal was exacted by a stoppage of work in August 1872
and occasioned an early “vend” among the Newcastle

^ See J. T. Sutcliffe, History of Trade Unionism in Australia {1^21), passim,

2 Concerning the Eight Hours Day see H. Murphy, History of the Eight
Hours Movement (1896); W. G. Spence, Australians Awakening (1909); T. A.
Coghlan, Labour and Industry in Australia, p. 1473 st passim; and the Australian
Encyclopaedia, vol. i, pp. 403-4. The Argus, 23 July i860, contains an account
of a strike of railway navvies against monthly instead of fortnightly “pays’*,
which that paper strongly supported.

® Concerning this richly endowed district which has contributed greatly
to the economic achievement of Australia, yet far beneath its power, which
produces wealth by pasture, agriculture, dairying, fruit-growing, wine,
coal, iron and steel, see F. R. E. Mauldon, The Hunter River Valley (1927).

3i8 labour shows FIGHT

colliery proprietors. In 1874 the Amalgamated Miners’
Association was formed at an intercolonial conference of
gold, silver, copper and coal miners held at Bendigo. Its
founder, W. G. Spence, sought to bring all miners into
a federal union which could arrange financial aid to any
in need, but would leave each colonial district self-govern-
ing in its own area. For a time he succeeded, and the
A.M.A. numbered 23,500 members, but its intercolonial
cduncil broke to pieces when in the late ’eighties Spence
turned his remarkable talent for organization to a greater
task. Till the century’s close the loosely associated craft-
unions among the miners paid most attention to accident-
benefits, essential to maintain their membership before the
days of wwkers’ compensation. Latterly they have joined
with the other unions in common political action, though
still proudly given to direct industrial action.^

Many of ^Ijie younger miners and miners’ sons went
shearing in New South Wales and Queensland from August
to December. Some followed the shearing almost all the
year round from the Gulf to Warrnambool. One of these
poured out their grievances to Spence and besought him
to form a shearers’ union to fight the unfair tactics of the
squatters and win decent conditions for these migratory
piece-workers. Spence accepted the call. When he opened
the books of the Amalgamated Shearers Union at 30
Armstrong Street, North Ballarat, on 3 June 1886, the
foundation was laid of what was to become the central
pillar of the Australian Labour temple.

The pastoralists had announced a cut of half-a-crown
a hundred in the rate for shearing sheep. The union
answered by enrolling 9000 members in six months
throughout Victoria, New South Wales, South Australia
and New Zealand. Until 1904 Queensland had its own
Shearers’ Union. Then its shearers joined the A.W.U. or

^ In the mid-colonial period they exerted strong pressure on the legislatures
for effective laws governing the inspection of mines and machinery, beginning
from a Victorian Act in 1877.

LABOUR SHOWS FIGHT

319

Australian Workers’ Union, the name which the original
body adopted in 1894 ^^th a proper discernment of its
native quality and a fine disregard of demarcations between
crafts and colonies. Under Spence’s leading, the union,
while providing “benefits”, relied rather on the power of
ideas than of money, and spent freely on the education of
its members in “union principles”. Its main aim was to
shape an agreement or contract excluding unfair practices,
and to make this contract the universal rule between
squatter and shearers. It objected to (i) “the second
price”, a right which squatters had hitherto reserved of
paying at a reduced rate for all the sheep a shearer had
shorn if any were badly shorn, cut or otherwise injured;
(ii) the rule that shearers must buy food and other require-
ments at the station-store where often the tradition of
the officer- traders of early Sydney still lingered; (iii) the
common “men’s hut” in which bunks, cook’s oven and
meal- table made an unsavoury jumble.^

In the campaign for better days the union enlisted
men in press-gang style. On the eve of the date set for
shearing to begin, a union “organizer” would gather
the shearers, most of whom had come to fill a “stand”
bespoken a year before, would fan their indignation over
the rumoured cut in the rate and propose a resolution
that they should stand together for “union terms”. If the
pastoralist, forced by the falling price of wool to cut his
costs, insisted on the wages-cut, and ordered the organizer
off the run, the unionists went with him, but not far.
Probably the organizer had picked out a waterhole nearby
which had been proclaimed a reserve for travelling stock
by a friendly government, in the days when the squatter’s

^ The men’s hut was usually a long, draughty, slab building without
windows. Two and sometimes three tiers of bunks would occupy the sides,
and from them came a nauseating stench of clothing saturated with “yolk”
from the wool and perspiration. The table for meals ran down the centre.
Cooking was conducted partly in the open, partly at an oven in the fire-
place across one end of the hut. The men were often expected to make their
own sanitary arrangements. Typhoid was an ever-present risk in the
shearer’s life.

320

LABOUR SHOWS FIGHT

father was fighting free selectors. There the unionists’
camp was the scene of frequent ^‘revival-meetings” in
which a new religion of mateship was feelingly unfolded
to the bushmen. The prelude to conversion was often
conviction of sin— the deadliest sin of “scabbing”. “The
man who fell once may be forgiven”, Spence ruled, “but
he is not fully trusted. The lowest term of reproach is to
call a man a ‘scab’.” To avoid that black pit the only
way was to join the union at once and to stand firm
always. Force was unhesitatingly used, however, to per-
suade the mulish. The men’s hut would be rushed under
cover of darkness, and if the squatter sought the release
of “his men” from the union camp he learnt from their
own lips that they had gone there voluntarily. Many thus
enlisted remained true to union principles. According to
the founder, the union practised a form of “dipping”,
being “grea^^believers in immersion as a cure for ‘scab’”.

Such guerilla warfare brought the agreement for union
rules into operation far and wide during 1887 1888.

The Masters and Servants Acts^ were often invoked, and
prosecutions for assault were not infrequent. But the speed
of Spence’s success had caught the squatters in disarray.
Often the drying of the grass enforced acceptance of the
new contract or the old rate. For grass seeds in the wool
may mean “carbonizing” wool only and low prices.
They may work into and kill the sheep. In a time of
booming employment in the towns, imprisonment of the
most skilled shearers was an economic blunder. The
“ringer” was often as good a unionist as he was shearer.

Over the Queensland border the fires of union enthu-
siasm were blown to greater heat by an immigrant
journalist breathing “socialism in our time”. William
Lane called for new and revolutionary unions which
should federate to win this goal. He was a Bristol man
who, after a grammar school education, had found his

^ See L. M. Thomas, ‘‘The Development of the Labour Movement,
1788-1848”, ch. V.

LABOUR SHOWS FIGHT

321

vocation in Canada and the United States. At twenty-
two he reached Brisbane (1883) and had soon attracted
a following by articles on labour problems in The Brisbane
Courier and in a paper of his own, The Boomerang. In
March 1890, he established The Queensland Worker to pro-
pound the doctrines of Karl Marx, Bellamy and Henry
George, and to be the mouthpiece of the Australian Labour
Federation. This was his masterpiece. The ferments of
socialist criticism of private enterprise and of union action
to mend wages and working conditions were just as active
and sporadic in Australia during the ’eighties as in England.
Lane added to youthful visions the task of linking the two
movements so that they should pursue a socialist objective
with union discipline and power. He had formed out of
the Queensland unions in 1885 ^ Trades and Labour
Council of the type that arose easily out of craft-unionism
in each capital city; but it lacked power to control piece-
meal striking. These spurts only alarmed emjdoyers and
spent union resources on bread and butter.

Lane wanted a more compact federation which would
gather into a disciplined movement the semi-skilled and
labourers as well as craftsmen. During 1889 a busy con-
solidation movement knit together the shearers, the mari-
time workers and the building trades of Queensland into
minor federations, and on 1 1 June of that year the Austra-
lian Labour Federation, which Lane had advocated, began
its existence at the Maritime Labour Hall, Brisbane. Its
first adherents were the city craft and waterside unions,
but the shearers soon joined. Their aid was vital, for the
migratory station labour made contacts with other wage-
earners throughout Eastern Australia and spread Lane’s
enthusiasm for united action wherever they went.

Queensland shearers were even more drastic in their
proselytizing methods than their comrades in the South,
and after two seasons of divided counsels and detailed
coercion the pastoralists of all the colonies realized that
only common action could meet the religion of which

S H

322 LABOUR SHOWS FIGHT

Lane had become the prophet. The heaven it offered to
the faithful at no distant date, control of the means of
production and exchange by the organized proletariat,
had in it no place for them. In August 1889 the London
“dockers” won their “tanner” after a world famous fight
in which the Australian unions’ contribution of £^0,000
played a material part. That gift accentuated the tension
which Lane’s hot-gospelling had caused in relations between
employers and workers throughout Australia. Henry
George himself came to Sydney late in 1889 preaching
the Single Tax against all land monopolists. An ardent
worshipper^ introduced him to the Australian people with
the cry “Ecce Homo!” His presence aggravated the itch
of rival devotees to tear apart and re-shape according to
their creeds an economy plainly working amiss.

Eighteen-ninety opened with the economic barometer
low and failing fast. Wool was down. Money was dear in
London. The Australian banks were pressing for repay-
ment of over-drafts. Unemployment was increasing and
there was talk of public works shutting down for lack of
loan money. Lane, through the Worker, to which Queens-
land wages-men became conscript subscribers on paying
their union dues, was advocating a “slate”, or labour
charter of concessions, in return for which employers
would be promised industrial peace for two years. But was
it likely that his followers, once they had tasted such suc-
cess, would rest content? Could the prophet of “socialism
in our time” hold them back? Employers, and especially
the pastorahsts, on whom falling wool prices weighed
heavily, did not care to wait on united Labour’s pleasure.
The Queensland shearers decided toshut every' ‘ scab ” out of
the wool-sheds. At Jondaryan Station the sheep were shorn
by non-unionists, as all the countryside knew, and the
wool, declared “black” by the unions, was forwarded to
Brisbane. The waterside workers or “wharf-lumpers”

^ Charles Garland, M.L.A., President of the New South Wales Single
Tax League.

LABOUR SHOWS FIGHT

323

refused to load it into the ship. W. G. Spence went north
and stopped an upheaval for which the employers were
evidently ready. An indemnity for the delay of their
vessel was paid to the British India Company. In the
southern colonies the diplomatic Spence and his Amalga-
mated Shearers were content to do their own recruiting
and sought from the pastoralists a collective bargain of
‘‘no shearing save under union conditions Negotiations
were proceeding on a basis promising continuous and
peaceful adjustment of the price and conditions of shear-
ing when suddenly a fresh storm broke into fury at the
southern ports.

On the intercolonial steamers a Marine Officers Associa-
tion had applied for higher pay and better conditions
aboard ship. Receiving scant attention, their Melbourne
branch announced that it had joined the other maritime
unions in affiliating with the Trades Hall. The shipowners
raised objection to such a bond between officers and sea-
men. It was likely to undermine discipline, to the peril
of ships at sea. At Port Adelaide on 15 August 1890 the
ships’ officers gave the shipowners the choice between
recognizing the affiliation with the Maritime Labour
Council or their own abandonment of the ships after a
day’s notice. It was a challenge. The employers took it up.
Both sides made public preparation for a general battle
between their organized forces. A union conference in
session at Sydney adopted the name of '‘Labour Defence
Committee”. Early in September a “ Pan- Australian
Conference of Employers” also met in Sydney. It an-
nounced a “right to freedom of contract between em-
ployers and men”, a “determination to oppose the use
of force and boycotting” and the employers’ “intention
to retain labour engaged during the strike”.

The dispute raised the very first issue of unionism, the
right of men to form a union and to join one union with
another in mutual support. It had at once involved every
maritime calling but one, and paralysed every port. The

21-2

324 LABOUR SHOWS FIGHT

exception was an important body — the marine engineers.
Picketing and riots in both Sydney and Melbourne could
not prevent the manning, loading and discharging of ships
so long as the engineers stuck to their posts. And there
was an abundance of non-union labour to be had among
the hosts of unemployed. The colonial governments pro-
vided fully adequate police protection. When the New-
castle coal-miners tried to stop the ships by refusing to
coal those manned by non-unionists, they were themselves
locked out. On 19 September, a clash on Circular Quay,
Sydney, between strike-pickets and wool-carters recruited
from station-owners and others of the directing class,
ended in the reading of the Riot Act and a charge by
mounted troopers. Desperate at the increasing activity
along the wharves, the Labour Defence Committee tried
to bring trade to a stop by calling out the shearers. The
telegrarhs^went out to every wool-shed at work on 24
September, and sixteen thousand shearers, ignoring the
squatters’ threats to forfeit their wages and sue them for
breach of contract, answered the union call to down tools.

At once it was seen by both sides that by that call the
union leaders had over-taxed their resources. The main
source of funds that had maintained the waterside and
maritime strikers vanished. The shearers were involved in
fines for offences against the Masters and Servants Act.
They had lost the wages due to them. When the Mayor of
Sydney made a fresh offer of mediation, the employers
stipulated that the shearers must be sent back to the sheds.
The Labour leaders, in complying on 2 October, were
palpably weakening. On the following day the employers
again refused the proposed conference unless the ‘‘freedom
of contract” for which they were fighting were first ac-
cepted. The union leaders were scattering. Funds were
almost exhausted. Return had not saved the shearers
from the legal consequences of the “call out”. Non-
unionists were working even in the coal mines. At Bulli
they were under artillery protection. The stalwarts stood

LABOUR SHOWS FIGHT

325

their ground, but on 17 October the marine officers, in
whose very cause the unions had taken action, agreed to
abandon affiliation with the other unions and to return
to their ships. That was the end of the Maritime Strike.
In one calling after another, the men, bitterly disillusioned,
returned on whatever terms and to whatever jobs they
could get. Instead of looking forward to ‘‘socialism in our
time”, as pictured in the glowing phrases of Lane, the
unions found their strength gone, their very existence
threatened, and themselves put on the defensive for a full
decade. “The unions”, Lane confessed after that rude
awakening, “are threatened with possible destruction by
very reason of their instinctive but at present unregulated
desire to stand by each other.’ ’

Before the year was out, the Queensland pastoralists were
dictating terms of shearing which made no mention either
of union or eight-hours day, which gave the station-
owner a right to limit the number of sheep to be shorn
and to say when the wool was wct,^ and required shearers
to tar all cuts and to find their own combs and cutters.
Public opinion whispered approval when Chief Justice
Darley in New South Wales spoke of the union shearers
as “a closely knit band of criminals with commissariat ar-
rangements, firearms and ammunition, devastating sparsely
inhabited country, holding the few inhabitants in terror
and compelling honest labourers to desist from work”.
Disheartened, the men at many inside stations accepted
the terms offered. Out back in the Central Division the
fight began again and the strikers organized a camp at
Clermont. “Make your choice within a fortnight”, said
the squatters, “or others will fill your places.” Though
this was represented then and since as a threat to bring in
Chinese labour, the squatters undoubtedly had in mind the
“free labour” they had recruited and could bring north
by shiploads from Melbourne and Sydney. A thousand

^ The shearers object to wet wool as it causes rheumatism and sores on
the hands which are hard to heal in the fly-infested back country.

326 LABOUR SHOWS FIGHT

shearers at Barcaldine talked openly of their resolve to
exclude the southern strike-breakers by force. The Queens-
land Government proclaimed such doings an insurrection
(23 February 1891) and despatched mounted police under
a resolute officer to maintain the peace. After a month
of tension and incendiarism at isolated points, the Govern-
ment ordered the arrest of the strike leaders. They were
charged under an unrepealed but almost forgotten statute
of 6 George IV, c. 129 with conspiring “to induce others
to depart from their hiring Most were convicted and
some sentenced to gaol with hard labour for three years.
Fines and imprisonment for rioting were meted out to
many, and the strikers scattered, powerless to prevent the
drafting-in of as many non-unionists as the pastoralists
needed. At a high cost in money and embittered feelings,
the Queensland pastoralists had brought it home to labour
that times had changed.

When in August 1891 the shearing was due to commence
in the southern colonies, squatters’ and shearers’ leaders
alike showed cooler judgment. The former agreed to main-
tain the union conditions, while the latter raised no demur
at the employment of non-union men. Unemployment
was still rife and prices were still falling. The mines felt
the pressure no less than the wool trade. The contract
system, a form of piece-work, was enforced in the Moonta
copper mines (S.A.) in October 1891, after a futile re-
sistance by strikers. In June 1892 it came back to Broken
Hill, from whose stopes the unionists had banished it by
a dramatic strike when the boom was at its height.

The effect of these turmoils on the financial situation,
though by no means helpful, operated through vague
opinion and fears rather than by changing economic
realities. In the darker days that so soon followed many
saw in the strikes the cause of every misfortune. They
would have made the labour unions the scapegoats of
unhappy communities. Such views ignored, however, the
unsound practices in private and public finance which

LABOUR SHOWS FIGHT 327

had destroyed the equilibrium of town and country and
over-capitalized almost every industry. The maritime and
pastoral strikes perhaps drew the attention of overseas
investors to the rotten superstructure and thoughtless
direction of Australian finance.

As the strikes involved the pastoralists in heavy ad-
ditional expense during two exceptionally good seasons
and made them hasty sellers of their wool, they may
have hampered the repayment of pastoral advances and
so the mitigation of the financial crisis. But that crisis
arose out of financial malpractice. Wage-cutting and con-
scription for the class-war, the aims of the contending
leaders, were short-sighted measures when the cool diplo-
macy and resource of constructive minds could alone
have reorganized business and production and redeemed
the colonies’ credit after the monstrous abuse of it by
“boomsters”. Possibly the labour troubles aroused in the
British investing classes a fear of labour-socialism. They
were in a position to call the Australian directing class
to an account of its stewardship, and did so in 1893 t>y
seeking to withdraw investments. Yet the labour unions
had been crushingly defeated in 1890-91. Was it that
British investors knew with John Bright that coercion
cures no evil and suspected that much remained to be
mended in Australia?

CHAPTER XIX

O ^ o

The Bank Smash and Economic
Reconstruction

o c<^ o

Nemesis tamed even after the labour turmoils,
choosing her time. The strikes delayed but did
not prevent the shipment of a non-perishable
staple — wool; and the seasons, especially in New South
Wales, continued very favourable. But prices were still
falling, and the searching criticism of all expenses that is
natural on falling markets put a stop to land-booming.
Speculativ^and all other building ceased suddenly and
absolutely. Forty-one land and finance companies failed
in Melbourne and Sydney between July 1891 and August
1892. There were four millions of British deposits among
the eighteen millions of their liabilities, and as some called
themselves “banks”, British investors began to wonder
about Australian banking in general. The Mercantile
Bank had suspended payment in March 1892. The Bank
of South Australia was absorbed by the Union Bank.
All was not well, but the Associated Banks of issue stood
in firm array until January 1893. Then the Federal Bank
appealed to its associates for aid, and on being refused it,
went into liquidation.

The older banks, it was known, must be finding many
worthless finance bills in their portfolios. Advances on
city land at inflated values could not all be repaid. Over-
drafts to the depressed primary industries were “frozen
hard”. To obtain liquid resources some banks continued
to solicit deposits in Britain even during 1892. Though
bought by high and rising rates of interest, such deposits
with Australian banks increased in that year by;;fi,i 80,000,

THE BANK SMASH

329

and the bank that sought them most urgently was Henry
Gyles Turner’s Commercial Bank of Australia. Its Aus-
tralian deposits were falling after 1890 at the rate of
^400,000 a year, but its British deposits climbed to
early in 1893. Wool and wheat still slumped
in value, and land banks and finance companies which were
known to have banked with the Commercial stumbled
and fell.

All classes in Australia, particularly in Melbourne,
were spending on necessaries alone. Trade was so dull
that balances in London could not be used to advantage.
The rates paid on the later deposits could not be earned
in Australia by advances on sound security. Above all,
this British money exert cdi a disintegrating force amorig
the banks themselves when solidarity alone could have
saved the weaker ones. If withdrawn, a British deposit
would deplete London balances renewable only by ship-
ments of gold or additional exports, a different matter
from the withdrawal of an Australian deposit which was
almost sure to be paid into another local bank. The older
and more wary banks which had kept down the mortgage
on their gold and London funds— most important funds
in financing a community whose foreign trade bulks so
largely — could hardly be blamed if they fought shy of
others’ burdens. But their caution became known and
spread fear among a sorely tried public. The resolutions
by which the Associated Banks thought to reassure the
world at large after the collapse of the Federal Bank were
so guarded that they were read as ‘‘Sauve qui peut!”

A run on the Commercial Bank was soon draining away
its reserves. In three months, deposits totalling a million
were withdrawn, 15,000 being paid over the counter in
one day. The Board knew that most of the British deposits
which fell due on May the first would be withdrawn.
Gyles Turner appealed to the Victorian Treasury and the
other associated banks. The Government had no funds to
spare in London and would not risk a Government note

330 THE BANK SMASH AND

issue in Victoria. The banks would find £i}750,ooo, but
this was not enough. The great Commercial ” suspended
payment on 5 April.

Before the month ended it had reconstructed”. The
process meant that nine millions of deposits were im-
pounded as ordinary or cumulative preference capital.
Five and a half millions of these were British, but the
depositors, after their long-drawn suspense, accepted the
^compromise with eagerness. It saved something from the
wreck. Warnings of withdrawals at due date led to a
general epidemic of reconstruction among the other Mel-
bourne banks early in May. When word reached J. B.
Patterson on Sunday, 30 April, that the National Bank
of Australasia would close next day, he gathered his fellow-
ministers, hastened by special train to the Administrator’s
country house where, as Executive Council, they drew
up a pro^amation of five days’ bank holiday. Next
morning, the news precipitated all Melbourne white with
panic, into Collins Street. Had all the banks failed? Those
whose headquarters were in Sydney or London opened,
ignoring the moratorium. All the Victorian banks but a
small one went into reconstruction. ‘‘We are all floun-
dering”, confessed the Premier.

In Sydney, Sir George Dibbs played the man. By the
third of May he knew that the banks could not act in
unison and at once pushed two emergency measures through
parliament.^ One of them made bank notes a first charge
on their issuers’ assets, the other gave the Governor-in-
Council power, at any bank’s request, to declare its notes
legal tender. A little later a third emergency law em-
powered the Treasury to issue its own notes and to lend
these to the banks up to half the total of the current ac-
counts locked up by any bank suspension. This was the
traditional policy of choking a panic with cash. For some

^ See T. A. Coghlan, Labour and Industry in Australia^ part vi, chapter ix,
and part vi, chapter vii. The author, as Government Statistician, shaped
the measures described. They arc said to have been suggested by the Hon.
R. J. Black, a director of the Bank of New South Wales.

ECONOMIC RECONSTRUCTION 331

reason, perhaps an old antagonism to government inter-
vention, perhaps the palsy of despair, the big Sydney
banks hesitated to ask in set form for the aid offered. The
Commercial Banking Company of Sydney, of which Dibbs’
own brother was the brain, suspended payment on 15 May,
though it possessed a million in hard cash and owed only
;^6oo,ooo to British depositors. Thereupon the Premier
wrung applications from the other leading banks and,
willy-nilly, made their notes lawful cash. This cleared the
air. Sydney’s gold reserves, no longer needed there, could
be used to meet demands elsewhere. Little need for them
arose, for confidence, or rather courage, had by this time
returned everywhere. Cecil Rhodes as Premier of Cape
Colony cabled on 25 May Lhat he would invest his Govern-
ment’s balances in Victorian or New South Wales securi-
ties or in a new loan to either government, if desired. His
offer was declined, but ‘‘as an indication of the pathway
of future events” a British Treasury official, writing later
in the year, thought it “more to be studied than all the
schemes of all the imperialists”.^

The very ease with which wealth had come to the
directing class in Melbourne had been its undoing. The
bank smash cancelled out the gold rushes and the land
boom. The whole cycle of events made up an economic
episode that left the population in Victoria with little
constructive experience. Some 232 millions in gold, out
of about 320 millions found in Australia prior to 1893,
had passed through Victoria’s hands. Her fortunate sons
had investments in every colony, more especially in
Queensland. They had had first use of ;(^54,690,ooo out
of the hundred millions lent and invested in Australia by
British capitalists between 1886 and 1890. The habit of
assuming that wealth would always fall into the lap of
“marvellous Melbourne” had been too easily acquired.
But 1893 broke the spell.

1 A. G. V. Peel, “The Australian Crisis of 1893“, reprinted with a reply
by Sir George Dibbs in N.S.W.y V. and P, 1894, vol. i, p. io2i.

332 THE BANK SMASH AND

The prestige and momentum of financial power were
gone. One source of expenditure which in the past had
increasingly stimulated trade in Australia went with them.
During the boom years the export of securities had raised
funds equalling a quarter of the colonies’ recorded pro-
duction. During the five years from 1891 to 1895, although
investment in Western Australia was fast growing, with-
drawals from Australia as a whole almost equalled re-
ceipts. On balance, only £^2 1 ,000 of outside money came
into the country. Victorians were forced to call up the
funds they had invested in other colonies, ten millions
being withdrawn from Queensland alone, Coghlan esti-
mates, during a run of exceptional seasons there.

In these straitened circumstances some of the banks
found need of legal permission to pay on the locked-up
deposits lower rates of interest than they had contracted
to pay kiAheir plans of reconstruction. Colonial courts
and legislatures gave them the easier terms they asked,
but such action at the expense of British shareholders did
not mend the repute of Australian investments. Of the
British deposits in the keeping of Australian banks in
March 1893 there were only thirteen and a half millions
left in 1900. Much had become preference capital; but
three millions had been lost outright, and much had been
repaid and withdrawn. Local deposits in Victorian banks
stood at :^39, 2 79,000 in March 1893; at ^29,698,000
when the century ended. Advances went down from
;(^50,ooo,ooo to ^29,400,000. Melbourne had shrunk as
marvellously as it had grown.

Victoria was not helped out of her debility by wise
political leading. The policies of her governments
during the ’nineties were starveling and uninspired.
Through the long crisis from 1889 to 1893 she looked in
vain for a statesman. Her most brilliant politician, Alfred
Deakin, had withdrawn in disgust after holding office in
the Gillies administration throughout the boom, and had
vowed not to serve again save in a federated Australia.

ECONOMIC RECONSTRUCTION

333

David Syme, with a mind set by age and by the atrophy
of unresisted power, could find only a scapegoat and a row
of puppets. Speight, the Chief Commissioner of Railways,
had succumbed to the boom and joined hands with the
politicians in building a spider’s web of parliamentary
railways. Inevitably, construction costs at boom wages rose
higher, and the marginal railways, serving undeveloped
and less important areas, earned less. The interest bill
swelled more rapidly than the railway revenue and the
old dreary succession of deficits ominously recommenced.
After March 1891, The Age attacked him as chiefly
responsible, owing to his extravagant over-building and
lax administration, for the alarming state of the colony’s
finances. Political patronage, Syme proclaimed, had not
even been scotched, but was still rampant. One man,
sheltered by the privileges of a permanent public servant,
was being used by ministers and members for their own
political ends.^

By December 1891 Syme had convicted Speight before
the supreme tribunal of Victoria — his own editorial desk —
of incompetence, extravagance and dereliction of duty, of
contempt of Parliament and public. He and his fellow-
Commissioners must go. James Munro, whom Syme had
put up in place of the Gillies-Deakin coalition in November
1890, hesitated to do his master’s bidding and was allowed
to retire to London as Agent-General. William Shiels, in-
stalled in his place in February 1892, obeyed orders and
suspended Speight, Ford and Greene, the three Railway
Commissioners. Being given compensation in lieu of salary,
Speight spent it in litigation against Syme on the score
of libel. After two trials, which dragged an expensive
course through three years, he was awarded a farthing
damages. 2 Having thus vindicated and confirmed his

1 The Age, leading article, Q2 June 1891.

^ The charges made by The Age and the addresses of counsel are reprinted
in full in The Great Libel Case: Speight v. “ The Age'*, a report of the pro-
ceedings in the second trial, 18 April to 26 September 1894 (Melbourne
1894).

334

THE BANK SMASH AND

power, Syme magnanimously contributed a cheque for a
hundred pounds to help the scapegoat to start life again
in Western Australia.

Graham Berry, the veteran protectionist leader, was
called to office again as Treasurer in the Shiels Ministry
and proceeded to set the finances right by increasing the
customs duties. This was not quite the old protectionist
policy, for it depended for success on a continuance of
imports, but it seemed to conform with recent experience.
Berry made the duties 35 to 50 per cent, ad valorem where
in Syme’s earlier tariff they had been 20 to 35 per cent.
But for some reason the remedy failed. Instead of the
increase of /^625,ooo the duties had been expected to yield,
the customs revenue went down by j(^6oo,ooo. The cessa-
tion of loans had dried up the London money and the
local spending upon imports which it financed. Higher
customs diji^ies only cramped still more a shrunken trade.
J. B. Patterson, succeeding Shiels and Berry in January
1893, had to face an accumulated deficit of ^^2, 650, 000.
He suggested lower duties and an income tax of sixpence
in the pound. These might have been accepted, but when
he proposed a retrenchment of all civil servants’ salaries
as well he provoked too many opponents at once. A general
election swept away the rash fellow. In his stead came, as
the best substitute Syme could put up, George Turner — a
suburban solicitor, myopic, cautious and tactful.^ From
September 1894 he continued as Premier and Treasurer
of Victoria — save for a temporary displacement in 1900 —
until in February 1901 he became first Treasurer of the
Commonwealth. During those years of gloom he served
his country faithfully. The newspaper dictator behind him
and his own native caution alike forbade any bold experi-

^ Walter Murdoch, Alfred Deakin, p. 185, describes Turner’s appearance
at the Adelaide session of the Federal Convention in 1897: “Early in the
proceedings he stood up and recited a catalogue of radical proposals” —
possibly from a newspaper cutting — “he looked and spoke like a busy
little shopkeeper rattling off a list of cheap lines”. But his appearance did
scant justice to a spirit of rare tenacity.

ECONOMIC RECONSTRUCTION 335

ment in re-casting indirect taxation, but he carried an
income tax in 1894 and did not shirk the task and duty
of retrenchment. In addition, he set every government
servant a personal example and, in his shirt sleeves,
worked for unheard-of hours at his desk, watching over
pennies and points of which no predecessor had known.
He cut expenditure to the bone, and scouted every sug-
gestion of more borrowing abroad. By a system of rigid
economy he made certain that Victoria reduced her public
spending and lived within her income. After 1897 he
was proud to show an annual surplus in her greatly
shrunken budget. Yet it was a family solicitor’s success,
not a statesman’s. Between 1895 and 1900 Victoria lost
75,000 of her folk by entigration, chiefly to people the
goldfields of Western Australia. The increase in the Vic-
torian population numbered during those years less than
one-fourth of the excess of births over deaths. Economic
relief came from private energy little helped by the state’s
policy, and from the success in primary production else-
where of the colony’s emigrant sons.

New South Wales followed other leaders and other
policies. E. M. G. Eddy, Sir Henry Parkes’ Chief Com-
missioner of Railways, had a reasonable chance as well
as the courage to control the railway service he reorganized.
Parkes’ Public Works Committee checked for a time the
baleful art of log-rolling in which the local members of
that over-centralized colony had been too skilled. There
was still waste to stop, however, and reform was
hampered by the colony’s lack of a clean-cut annual
budget. Ministers might initiate without the consent of
the Treasurer expenditure up to ,^^20,000 on any item — an
opening for commitments which made a firm control of
the finances hopeless. Under a system which also carried
over, from one year into another, votes which had not
been spent in full, it was hardly possible to know how
the public finances stood. Deficits could not but appear,
and there was no definite reckoning-time to spur public

336 THE BANK SMASH AND

and Parliament into the task of meeting them. Public
revenue per head had remained stationary at £8. 15^. Srf.
between i88r and 1891, but ordinary expenditure had
grown during that decade from ^(^7. ii^-. 2d» per head to
£9* 3^. 3^?. In addition, forty millions of loan money had
been spent, not all of it on ‘‘reproductive” works.

Sir George Dibbs had shown the quality of decision
during the bank crisis, but he incurred the discredit of a
state of chaos in the public accounts for which he was not
responsible. His advocacy of protective duties as a cure
for the colony’s ills made no appeal to a community that
saw what Victoria had achieved, that had an old distrust
of monopoly and that had been aroused to enthusiasm
for free trade and direct taxation by Henry George. At
the general election of 1894, Dibbs’ followers were routed
by a double attack from radical freetraders under George
Houston Reid and from the Labour Party.

In five busy years in office, Reid enacted a series of
financial, agrarian and fiscal reforms which set free to
considerable purpose the resources of the land and the
energies of its people. First, he made provision for an
annual budget in which, as in the other colonies, the public
accounts would be balanced on a cash basis on 30 June
of each year. Appropriations from the consolidated revenue
which had not been spent during the year when they were
voted would lapse at its close. He sought to clarify the
main budget of the colony by relieving it of local expendi-
ture and setting up local governments and municipalities
throughout the colony. Incidentally this measure would
have lessened the intrigues and bargains for local favours
that poisoned the atmosphere of Parliament and cor-
rupted both electors and elected. It provoked, however,
a combination of the regular Opposition, Labour and
“local members” from Reid’s own party who felt they
could acquire merit in their clients’ eyes by no other means
than petty services. The allies inserted an abolition of
plural voting by property owners which Reid would not

ECONOMIC RECONSTRUCTION 337

accept. His zeal for simplification was tempered by Scottish
caution.

Joseph Carruthers, his Minister for Lands, carried, how-
ever, a revision of the laws governing the selection of
Crown lands which time was to prove a little too bold for
democratic sentiment. In conjunction with the land taxa-
tion on a basis of unimproved values which Reid started
then and which Carruthers later developed, the new land
laws reasserted the public interest in sound settlement.
They separated the combatants in the old agrarian feud ;
they afforded farmers fair access to land which they could
put to uses more profitable than pasture, and they relieved
out-back pastoral lessees from the worse forms of bogus
selection.

Earlier amendments of the Robertson system^ had in
large measure eliminated the conflict between leasehold
and free selection by dividing the pastoral leases into
“resumed” and leasehold areas. The former, though
legally resumed, remained in occupation by the pastoralist
until someone saw fit to select. The incentive to dummying
on such areas therefore remained. On the leasehold areas,
however, selection was barred and the pastoral lessee was
secure for five, ten, or fifteen years in the Eastern, Central
and Western Divisions respectively. But all such expedients
short of the full security of freehold call for watchful
administration if the interest of posterity in a plastic
land system is to be upheld. The amending acts limited
the patronage of Ministers of Lands and wire-pulling
members by setting up sixteen local land boards. These
would judge the good faith of applicants for land and
scrutinize their fulfilment of the conditions of purchase.
The most important condition, that of residence, had in
1884 been raised from three to five years. This was
intended to make more expensive the practice of store-
keepers in country towns of subsidizing dummies with
rations and taking payment at the end of three years in

^ Notably the Crown Lands Acts of 1884 and 1889.

THE BANK SMASH AND

338

the land they had selected from the pastoralists’ runs. The
Act of 1889 set above the local boards a Land Appeal
Board. This took the place the Minister had held. The
Lands Department, it was argued, was an interested party
in many cases that were made the subject of appeals. The
new court of three members exercised its judicial functions
wherever the business before it required its presence.
Land causes led to itinerant justice as when the first and
second Henries built up the royal courts of England.

Such steps did something to separate the combatants
who had warred for the public estate. But more was
needed to encourage a financially crippled population
to lay out slender resources in the risky business of
growing a crop under the sun and the rain. The town
population, as Carruthers reminded Parliament, had in-
creased between 1861 and 1891 from 159,834 to 730,000;
the country folk only from 189,1 16 to 338,32 1 . The failure
of free selection, with its record of blackmail, dummying,
litigation and financial disaster was, he claimed, as plain
as Holy Writ. But there have been disputes on the inter-
pretation even of Holy Writ. Carruthers carried the men of
New Soutli Wales with him in his reading of remedies for
the failure when, for the mad scramble of free selection
before survey, he substituted two principles well tested
in the southern colonies — selection after survey and the
classification of Crown lands. The former substituted
orderly surveying for desperate unreason. The latter pro-
ceeded along tentative but sound economic lines, (a) setting
apart areas suited to specific forms of selection and (b) put-
ting varying values per acre on the blocks surveyed for
settlers. He was on well-tried ground, too, when he made
extensive use of a five years probationary lease as a test
of the good faith of applicants for agricultural land.

Reid and Carruthers broke new ground in an ambitious
plan to stay the alienation of the public estate by sub-
stituting agricultural leaseholds for freeholds. Robertson’s
conditional purchase had scattered freeholds throughout

ECONOMIC RECONSTRUCTION 339

he countryside. The 1895 amending act offered long leases
nd security of tenure on an improvement basis. For
;razing farms ‘‘settlement leases” of 28 to 40 years were
;iven at rentals of to 2| per cent, on the capital value
if the blocks, subject to re-appraisement at the end of each
ifteen years of the lease. Within the first eighteen years
ifter 1895 some 8,793,000 acres were taken up on this
enure. But the country residents of New South Wales
lad seen and done many things in defeat of leasehold.
They had small reason to expect security at the hands of
government. Early in the next century, before many
ettlement leases had come up for their first re-appraise-
nent, this tenure was made convertible into freehold for
:ertain areas per lessee.^

In increasing from five to ten years the term of residence
equired on ordinary conditional purchase (Robertson)
elections, the Carruthers Act stiffened the tests of agricul-
ural intentions applied to those seeking freehold farms,
iut it offered leasehold farms as well. These were called
lomestead selections, and were surveyed before settlement
)n areas set apart for agricultural occupation “on a
ace”, i.e. unmingled with pastoral runs. The object was
o divide resumed areas into blocks which in the ordinary
un of seasons would maintain an active farmer’s home.
i.ach settler might obtain one block only. After residing
)n it for five years and effecting specified improvements,
le would be given a homestead grant. Both forms of
easehold selection were originally made subject to the
:ondition of perpetual residence by the lessee or his trans-
erees. The lessees of homesteads paid i J per cent, on the
ippraised value for five years and thereafter 2^ per cent.
Nowadays the rate is 3I per cent, “if residence is per-
formed by deputy”.^ At first, extensive areas were occupied

^ New South Wales Official Tear Book, 1927-8, p. 724, shows that of the
J, 793,663 acres granted as settlement leases up to 1913 over 5,000,000 acres
vere converted to freehold between 1909 and 1927.

* Official Tear Book, 1927-8, p. 726. In 1912 a new form of lease-

lold, the “homestead farm”, was evolved.

22-2

340 THE BANK SMASH AND

on such leasehold terms, but with agricultural success the
hankering for freehold and security from re-appraisement
proved too strong. In 1908 facilities were conceded for
the conversion of homestead selections into conditional
purchases, i.e. freehold.^

Though backsliding was to follow later, the method of
lending public land at a nominal rental to genuine settlers
opened the way in the poverty-stricken ’nineties to a big
agricultural advance. Money for the purchase of the free-
hold was sadly to seek. The little capital that could be
found was used as working capital at a time when ad-
vances against land were regarded askance. Carruthers’
Act opened a way to much active farming in the great
central scrub from Booligal to the Bogan, and elsewhere
on the Western Slopes and in the Riverina.

Farther west the confusion was not easily mended. On
the resu'mW halves of pastoral leases, free selection of
grazing farms under the Act of 1884 had unhappily
coincided with the era of falling prices, with drought and
with the spread of rabbits through the Darling basin.*
Even when he meant well, the grazing selector could make
no headway, and many a “resumed half” became a mere
breeding ground for the rabbit pest. Carruthers granted
revision of rents to the pastoral lessees whose land had
been devastated, and, whenever any area was withdrawn
for settlement, an extension of lease over the remainder
of the run proportioned arithmetically to the fractional
area taken. But in the west, the great King Drought
remained master all through Reid’s rule.

Reid’s fiscal reforms were, like his financial practice and
his colleague’s land law, a return to simplicity. He en-
couraged his fellow-colonists to persist with the colony’s
natural industries by taking every removable burden off
their costs, enabling the miner, the dairyman and the

^ See V. S. Childe, How Labour Governs, pp. 14, 33, as to the political
reactions of the “Conversion Act**.

* See D. G. Stead*s 2irticle “The Rabbit**, in the Australian Encyclopaediay
vol. II, pp. 355-8.

ECONOMIC RECONSTRUCTION

341

cultivator to aid the pastoralist in finding from the land
the exports needed to restore confidence and prosperity.
Though it cost him half his majority and a sharp parlia-
mentary struggle, Reid removed Dibbs’ light protective
duties, reduced some of the older duties on conventional
necessaries such as sugar, and derived new revenue from
added duties on narcotics and stimulants and from light
direct taxes on incomes and the unimproved value of land.
He was forced to retain certain specific duties on neces-
saries as concessions to conservatism when pushing the
direct taxes through the Legislative Council, but his
revenue tariff was simpler than that of Great Britain
herself.

Under it, New South Wales made a recovery in bold
contrast with the long stagnation that followed 1893 in
Victoria and South Australia. Only in Western Australia,
indeed, was the mother colony’s expansion under free trade
surpassed. It embraced both primary and secondary pro-
duction, commerce as well as industry. The area under
wheat expanded from 647,483 acres when Reid took
office to 1,426,166 acres when he left it. Sydney recovered
her chief place as the distributing centre for Australia,
New Zealand and the South Pacific. Her re-exports rose
from ^£*4, 700,000 in 1894 to 10,000,000 in 1898. After
the crisis, 17,000 houses stood empty in Melbourne.
Sydney’s population hardly ceased growing, and by 1899
the building trades there were as active as in 1891. In
every colony men set about increasing production from
the soil. The decade 1891-1901 saw an increase in the
number of Australian breadwinners engaged in primary
production from 419,499 to 535,766, from 30-7 of the total
breadwinners to 32-5.^ Nowhere, however, was such all-
round success achieved as in New South Wales. In effect,
Reid’s tariff stipulated that no manufacturer should make

^ See Tables on p. 891 in Commonwealth Tear Book, no. 20. The return
to gold-mining in W.A. accounts for much of the increase, but this is the
only decade since 1871 in which Primary Production has gained upon
Transport and Industry in numbers occupied.

342 THE BANK SMASH AND

his fellow-Australians’ tasks more expensive, that no in-
dustry was wanted which did not maintain its footing
by fair service at a fair price in the main task of lifting
the net income and real standard of living in the colony
of New South Wales.

This was uphill work. An unprecedented drought re-
duced the flocks of New South Wales from nearly 57 mil-
lions in 1894 to 36,213,000 in 1899 and 26,650,000 in 1902.
Save for a temporary spurt in 1899, wool remained low
in value too; yet the wool-clip was maintained at almost
its old total by the increased weight of the average fleece.
The production of wool in New South Wales fell off by
less than twenty million pounds in the decade, from
321,416,000 pounds in 1891 to 301,942,000 pounds in
1901. Moreover the installation of refrigerating engines
on steamers plying to Europe added a new source of
income from Australian pastures. New South Wales did
well with frozen mutton. Even if the lighter carcase of
the Merino compared unfavourably with New Zealand’s
crossbreds, it was worth more in that form than as tallow
from boiling down or as meat on the local market.
Queensland pastoralists led the way in exports of frozen
and chilled beef.^ But refrigeration helped the small
farmers even more than the pastoralists. Their crossbreds
produced better lambs for freezing and their butter be-
came for the first time a profitable export.

The Victorian market had been glutted with “dairy
butter” in the ’seventies when it was retailed at sevenpence
a pound or sold at if</. a pound in casks to the soap-
makers. An unrefrigerated shipment of 2| tons was sent
to Leith as an experiment. Why Leith was chosen as its

^ Three men deserve honourable mention for their efforts along different
lines to solve the riddle of sending refrigerated cargoes of Australian perish-
able commodities to Britain. They were (i) James Harrison, a Victorian
inventor and journalist {Australian Encyclopaedia, wo\. i, p. 6oi), (ii) Thomas
Sutcliffe Mort, a Sydney wool-broker and man of enterprize {id. vol. ii,
p. 144), and (iii) Robert Ghristison, a Queensland pastoralist (M. M.
Bennett, op. cit. chapters xv and xvi) .

ECONOMIC RECONSTRUCTION

343

destination is hardly apparent. It sold as grease at a
penny a pound. There was no future for Gippsland dairy
farms in those prices. Then came the refrigerator (1882)
and the Danish cream separator (about 1885). The first
consignment of refrigerated butter sent to London brought
sixteen pence a pound. In this new export Victoria led
the way. Her shipments to England rose from 1,286,583
pounds in 1890 to 13,141,423 in 1893 22,139,521

pounds in 1894. Co-operative central butter factories
turned out a more uniform and dependable product, and
raised the value of a dairy cow from 3(^3. los. on an inde-
pendent farm making its own butter by hand-churn to
£8. los. when the farm supplied cream to the factory or
milk to the creamery. Ta^; mania was pioneer in the export
of fruit in cold storage, mainly apples.

At the end of the nineteenth century it was easier to put
Australian food on English tables in perfect preservation
than it had been to put French or Irish produce there
when Queen Victoria came to the throne. Commodities
once of little value became the basis of intensive settlement.
In this the years following the bank crisis were those of
most activity. The new economic strength of dairy farming
was shown in the voluntary sub-division of pastoral free-
holds, which were sold or leased as small farms to dairymen
and fruit-growers. These men could now pay for their
land at enhanced prices, and make good incomes too,
where the free selectors had failed. Yet since they faced the
competition of Denmark and Ireland in butter, and of New
Zealand and the Argentine in mutton and beef, their
success was conditional on high efficiency and low costs
of production. The big share which New South Wales
took in each of the new export trades showed an adapta-
bility in agriculture that she had once notably lacked,
and in this turning of the tables on her southern neigh-
bours the advantage of her revenue tariff was not slight.

In the ’nineties, also, the riddle of permanent wheat-
farming in Australia was solved. Necessity proved again

344

THE BANK SMASH AND

the mother of invention. Edward Lascelles, applying
South Australian methods on a large scale, developed a
new wheat area which soon spread over a million acres
of the Victorian Mallee lands. These had been thought
hopeless for agriculture because the eucalyptus scrub
stooled out with fresh vigour when the main stems were
cut. After 1876 the spread of rabbits led to the abandon-
ment even of pastoral leases there. South Australians first
hit upon the idea of “mallee-rolling”, i.e. of “Mullen-
izing” the land by dragging over it with a team of oxen
a heavy roller made from an old engine-boiler or a tree-
trunk. The snapped stems and foliage were then burned
off and the stump-jump plough set to work among the
mallee-roots that had not burned in the dry soil. Lascelles
planned the conquest on a large scale of a new virgin
area for agriculture. He provided water by irrigation and
transport .by,a light railway. Having demonstrated that
cultivation on extensive lines would cover the light costs,
he sub-let to share-farmers his “pastoral lease” at Lake
Corrong (now re-named Hopetoun), and his example set
flowing a vigorous current of settlement.

Irrigation works initiated by the Gillies-Deakin govern-
ment in the Goulburn and Wimmera valleys under an
Act of 1886 had been stultified by the doubt whether the
market could absorb much fruit and small produce. Nor
had governments after the boom the resources of money
or courage needed to educate the settlers on the irrigated
lands into paying the cost of their reticulation. Lascelles,
however, had found another use for the irrigation channels
northward from the Wimmera, as means of supplying
stock and domestic water over wheat-growing areas. The
winter rains watered the crop, but there were as yet few
sound catchments, and summer rains were too capricious
to refill the dams. Government railways were constructed
with light or second-hand rails, and gravitation channels
were extended from the Grampians watershed to enable
new farmers to test Lascelles’ ideas. Their conquest of the

ECONOMIC RECONSTRUCTION 345

Mallee for agriculture enlarged the Victorian area under
wheat from 1,145,163 acres in 1890 to 2,017,321 acres
in 1900.

In South Australia the wheat area fluctuated from
i>673)573 acres in 1890 to 1,913,247 acres in 1900, though
still remaining smaller than it had been in the ’eighties.
But South Australian farmers were at last listening to the
professors of Roseworthy College and dressing their wheat
fields with superphosphate. In 1896 they used 600 tons of
“artificial manures”, mainly superphosphate of lime. By
1 900 they used 24,000 tons, and the average yield in a season
of by no means favourable rainfall rose to 5-88 bushels.
Since then. South Australian yields have abundantly borne
out Professor Lowie’s prediction that they might well be
doubled when normal seasons returned. The Victorian
Wimmera and Mallee districts, largely settled by South
Australians, were quick to follow this lead. Superphos-
phate was first used around Nhill in 1897 — “the year of
the cyclone”.^ In spreading it, a selector named Salter
took a hint from an old practice of steeping seed-wheat in
liquid manure and nitre. After he had pickled his seed
with bluestone, he mixed superphosphate or Thomas phos-
phate with it so that each grain received a coating of
manure, rushed the seed to the field and sowed it broad-
cast by hand before it had time to dry. This obviated the
difficulty of sowing with the old seeding-machine that had
a centrifugal action; it had sent seed and “super” flying
in different directions. But Salter’s method was little
better. Though 9-75 inches of rain fell during the growing
period that year, only three bushels an acre were harvested.
During the next two years, the Department of Agriculture
showed the farmers how to “drill in” both seed and
manure. The imported superphosphate “ran” badly, being
lumpy with moisture absorbed when crossing the tropics,

* W. E. Dahlenberg, “Thirty Years of Wheat-growing at Nhill”, in the
Ganmain Express y 7 May 1926 — an excellent summary of the methods which
have made the Wimmera pre-eminent as a wheat district.

346 THE BANK SMASH AND

but the value of the new method was at once apparent.
Supplementing the stump-jump plough and harvester, the
drill and its later derivative the combine (cultivator and
drill) have made the Australian farmer master of his little
world and almost independent of hired labour.

More than the general use of superphosphate, however,
contributed to the rapid advance of wheat-growing that
marked the decade after the drought. Fallow, repeatedly
worked to give a firm level seed-bed covered with a mulch
of dry tilth, conserves for the crop plenty of nitrates and
much of the previous year’s rainfall. That is the essence
of dry-farming”, taught by stern necessity in South
Australia and Victoria during the persistent drought of
the ’nineties. But the greatest lesson then learned came
from an amateur botanist in New South Wales — the lesson
of pedigree and graded seed.

The western slopes of New South Wales are within the
zones of both the summer and winter rains. Sometimes
they receive both, sometimes neither. The wheat crop is
thus exposed to dangers of drought and rust. An English
surveyor with a love of botany decided that the heavy-
flagged, soft-grained wheats, favoured for their big yields
in lucky seasons by his neighbours near the present site
of Canberra, were ill-adapted to face such climatic
vicissitudes. In 1889 heavy losses through rust had spoilt
a favourable prospect even in South Australia. William
Farrer knew that the nature of the rusts precluded any
curative treatment of the growing crop, and set himself
to breed varieties of wheat that could resist or escape
their onslaught.

He chose to breed, by careful cross-fertilization, varieties
that would have the characters he wanted, rather than
await and select nature’s chance crosses. With a construc-
tive method such as this, he thought he might achieve as
well two further objects — to produce types suited by
their economy of flag and early maturity to the short
growing-season of western New South Wales, and to im-

ECONOMIC RECONSTRUCTION 347

prove the gluten-content and milling strength of Australian
wheats. He wanted, in other words, a rust-and-drought-
resistant wheat-plant, the flour from which would absorb
much water and produce more well-risen loaves. He began
his researches in 1886 at Tharwa near Queanbeyan^ and
in 1890 attracted the attention of the more intelligent
officers of the Department of Agriculture. They invited
him to Sydney in 1891 and sent him to Adelaide in 1892
to conferences on the rust problem. Even with the old
wheats. New South Wales was advancing fast as an agricul-
tural colony. In 1897 she exported bread-stuffs for the
first time; her subsequent success, however, was largely
Farrer’s achievement. By 1898 he had bred wheats re-
sistant to the rusts of his g vn district, and his new wheats,
‘'Bobs’* and "John Brown”, were being eagerly sought
for their ability to stand up to drought and their yield of
stronger milling grain. In 1902-3 he was able to distribute
in bulk a seed- wheat called "Federation” which has
literally changed the whole aspect of the Australian wheat
fields. It makes a short-strawed crop, unattractive in the
paddocks because of a bronze appearance quite unlike
the golden harvest of tradition; but it won favour by sheer
yield. Produced to be cut by the stripper-harvester, the
plant wastes little of its time and strength on straw, but
throws a moisture-content that the sun drinks greedily
from soil or leaf into heads well-packed with translucent
grain. Farrer’s work and that of his pupils neither started
nor stopped with "Federation”, but it was that variety
which, as dramatically as McArthur’s Merinos, laid the firm
basis of a great exporting industry, in this case the high
quality of the dry white wheats of Australia. His "abstruse
experiments in cross-fertilization” put the staple crop of
Australian farmers into something like competitive equality
with wool inside the ten-inch winter rainfall line.^ They

^ In a paper on “The Making and Improvement of Wheats for Australian
Conditions read before the Australasian Association for the Advancement
of Science at Sydney in 1898, Farrer explained in detail his aims and
technique and the economic possibilities, as he saw them, of Australian

348 THE BANK SMASH

did more. At last settlers had the means — in labour-saving
implements, dry-farming, superphosphate and pedigree
wheats — of accepting the land so long offered them and
of making permanent homes in it.

But the generations of semi-nomadic agriculture had
wrought a havoc with the settlers’ standards of domestic
comfort which it will take much time to repair. Still to
the Australian farmer “home” recalls

A track winding back
To an old wooden shack
Along the road to Gundagai.

wheat-growing. The paper was printed in full in the Agricultural Gazette of
New South Wales, vol. ix, parts ii and m.

CHAPTER XX

Back to Colonizing

WHEN in the ’nineties British investors looked
askance at Australian public and private securi-
ties, other exports were needed to meet Australian
commitments abroad. Mining, and especially the old
simple gold-digging, played a big part in producing the
goods. Some of the city unemployed in Victoria and New
South Wales went fossicking on old alluvial fields, with
considerable success. Companies treated the tailings of
old crushings by the new cyanide process. As a result,
the New South Wales gold output rose from ,^460,285
in 1890 to I >3 1 5.929 in 1895, that of Victoria from

;(^2,354,244 to ;^2, 960,344 in the same period, and the
Australian output from £5.231,466 to £7,708,029. The
last figure included a new contribution — ^£879,748 from
Western Australia.

Here alone the days of the diggings had come again, with
their sudden rushes, their flamboyant style, with fabulous
gains for a few, excitement and toil for all. But there was
a big difference in the West. To make life bearable or even
possible on the diggings there, the aid of the state was from
the first essential to a degree that had never been known
at Bathurst or Ballarat. The widely scattered discoveries
of alluvial gold made in 1887 at Golden Valley and
Southern Cross in the Yilgarn Hills, in 1888 on the de
Grey and Oakover Rivers in the Pilbarra district, and in
1889 at Lake Austin in the Murchison, were all in regions
of intense heat and prolonged drought. Supplies of water
for considerable populations in such places would cost
time and money. In spite of official warnings, however.

350 BACK TO COLONIZING

inexperienced miners and camp-followers crowded thither
and by their very sufferings forced the officials of the Crown
Colony to take urgent measures to avoid wholesale disaster.

Luckily the grant of responsible government freed the
courage of John Forrest from the curb of Westminster. This
was no race to be won with tight reins. As an explorer he
had known tvhat thirst meant in that inland country, and
though attacked and reviled by the noisier element on
the “fields” whose growth and needs outran even the
boldest measures, he laboured faithfully with the aid of
subordinates as great-hearted as himself to make habitable
the harsh, ill- watered areas where the “ t’othersiders ”
swarmed. Self-government had brought release from the
veto of the Colonial Office on colonial borrowing. A few
years earlier, when the public debt of the colony was a
million and a quarter. Governor Broome had been refused
leave to . borrow ^500,000 for public works. The first
Parliament elected under responsible government (1891)
authorized the flotation in London of a loan of 1,336, 000
to build an Eastern Goldfields Railway from Northam
to Southern Cross, to make a harbour at Fremantle and
to provide water out back. The contractors pushed the
line out quickly and made good profit by private operation
of it for some months before it was handed over to the
government.

Before the railhead had reached Southern Cross, John
Ford and Arthur Bayley, a lucky prospector from the
Murchison field, had pushed eastward from “the Cross”
with two months’ provisions on their pack-horses. In July
1892, finding good grass on a flat which the natives called
Coolgardie, they rested their horses. In an hour or two
they had picked up twenty ounces of gold in small nuggets.
Supplies ran short and they were compelled to return
to Southern Cross. The raw gold in which they paid for
more provisions brought others on their tracks, but not
until they had taken from the cap of a reef five hundred
ounces of free gold.

BACK TO COLONIZING

351

On 17 September 1892, Warden Finnerty at Southern
Cross granted Bayley’s reward claim. On camels, horses,
bicycles or afoot, almost every man there rushed helter-
skelter to Coolgardie. “In Perth and Fremantle everyone
seems to be either carrying tents, picks, shovels and dishes
or otherwise preparing for the road.”^ Four hundred men
had won three thousand ounces at Coolgardie before the
end of October. Then the lack of water drove almost all of
them back until the long hot summer was over. From Mel-
bourne, Adelaide and overseas, unheard-of numbers came
to Albany and Fremantle to be ready for the rush when
the winter rains returned. Officials made ready to dig
big dams and to bore for artesian supplies. In 1893 the
colony spent ■£ 1 5,000 on water supplies at Coolgardie and
along the Goldfields road, a big sum for a community
inured to economy. It proved, however, ludicrously low
for the needs of those now arriving. Four thousand five
hundred had come in 1892, five thousand came in 1893.
By ships that risked foundering in the great winter rollers
of the Bight, heedless of any discomfort, they made the
passage from the depressed towns of Victoria and South
Australia to share in the glittering prizes of Fly Flat. A few
hardbitten “overlanders” made their way with camels or
horses across the Nullarbor Plain that till then had
separated East and West as completely as a sea. From
Britain too came adventurers of all classes and qualities;
they made a new and vigorous community with all the
variety and fecklessness of the old Victorian days.^

Sensational finds by prospectors continued and the new
government’s difficulties in providing water and transport
were extreme. The gold occurred here and there in rich
pockets. The richness of the finds brought great numbers
to the scene, but the limited extent of the rich patches
in every early discovery made Perth officials reluctant to

^ West Australian, 2i September 1892.

* Pierre Leroy-Beaulieu gives an excellent picture of the Western
Australian “Gold Fever** in Les Nouvelles Sociitis Anglo-Saxonnes, chapter vii
(1896).

352

BACK TO COLONIZING

incur heavy expense on permanent water-works. Yet, with-
out water in plenty, permanent mines were impossible.
High working costs would prohibit any attempt to extract
gold from the lower grade ores.

Boring for artesian supplies had revealed only salt water.
Public and private “condensers”, stoked up with the
salmon gum timber that grew as a sparse but almost
^universal forest on the Coolgardie goldfields, distilled
fresh water from this, but only in expensive driblets. By
the end of 1895 government had built at a cost of
^37,700 tanks and dams to hold 13,500,000 gallons, but
by then the population was increasing by tens of thousands
each year. Moreover, surface water was not safe. Typhoid
fever, already endemic on the fields, showed a significant
spurt of virulence after each rain. Sanitation was of the
crudest. Soil and dust around the camps were charged
with gern» that too easily infected dams and the tanks
supplied from roofs. ^

Another reason for caution was the atmosphere of bluff
and knavery that gathered around “new finds”. Authentic
and really wonderful samples of ore from these might even
be sent to London, but they seldom continued at depth.
Before operations could continue, local managers had some-
times, so the story goes, to request London to “send back
the mine”. Such fields had already attracted company
promoters whose market rigging threatened to accentuate
their speculative repute. Clear vision and bold action
were needed if a stable community were to establish itself
in the wilderness. Yet courage and chance did achieve
that end.

In June of 1893 a rush of about 150 men had set off
from Coolgardie towards a locality termed “Mount Youle ”,
said to be fifty miles out, to the north-east. Perhaps a
trader started the rumour as a ruse to sell stores. Most of

^ Sec J. H. L. Gumpston and F. Macallum, History of Intestinal Infections
(Comm. Dept, of Health, 1927), p. 402, for a letter from G. H. Hill, Health
Officer at Coolgardie, May 1895.

BACK TO COLONIZING

353

the party camped for two days in some rocky country by
Mount Charlotte, held up by lack of water. Rain fell,
and all but two pushed on. Hannan and Flannigan stayed,
the latter having spotted’* some surface gold; in a day
or two they had found a hundred ounces. Hannan pegged
out a reward claim; it was granted, and in two days more
half Coolgardie was encamped at ‘"Hannan’s”, now Kal-
goorlie. Almost as a matter of course London companies
were formed to exploit the gold-bearing lodes at depth.
To the general surprise it wa^ found that here the rich
patches did have considerable depth, and length too, over
a full Golden Mile. When Sir John Forrest visited the
fields in November 1895 he found several mines assured
of ranking for years to ccme among the world’s biggest
producers.

The evidence of their permanence, backed by vehement
clamour from the diggers, convinced the Premier that
ample water must somehow be supplied both to the
mines and the city growing up around them. Early in
1896, C. Y. O’Connor, the colony’s Engineer-in-Chief,
decided that the best plan was to build a weir on the
Helena River, in the Darling Ranges near Perth, at a spot
called Mundaring. The rainfall there averaged well over
forty inches a year, and from the Mundaring Reservoir
five million gallons daily could be pumped, along a pipe
line thirty inches in diameter, 330 miles to the eastern
goldfields. Men gasped, but Forrest stood by his adviser,
and at his wish Parliament authorized the borrowing of a
million and a half to build the weir, install the pumps and
lay the pipe-line.

While the work was in hand, the gold yield rose from
3^1,068,807 in 1896 to :){^35990,699 in 1898 and passed six
millions in 1900. London investors readily found money
for public works in the colony, even though they were
fighting shy of other colonial securities. In 1896 and 1897
Western Australia was the only Australian colony to raise
new loans in London. Masses of rich ore had been

S H

354 BACK TO COLONIZING

discovered in the Murchison and other northerly fields and
railways were pushed out from Cue to Meekatharra, from
Kalgoorlie to Laverton and Leonora. The boom-time
congestion of goods on Fremantle Wharf— 'the farm’’ —
was at last cleared, and in appearance, though by no
means in truth, the newcomers had taken charge of the
busy community of 175,113 in 1900 which contrasted
strongly with the sleepy 47,081 to whom, ten years earlier,
responsible government had been granted. All but a few
were waiting eagerly for the impetus to mining which
should come with the operation of C. Y. O’Connor’s great
water scheme.^ Early in March 1902 the "Scheme water”
reached Kalgoorlie, but when it did so the great engineer
who had planned and achieved this triumph had resigned
his cares. Worn out by his labours in substituting for
the open roadstead of Fremantle a safe harbour at the
Swan JR^yer’s mouth, and in pumping a river up to the
arid interior, he died by his own hand on the eve of the
popular celebrations. It was enough for him that the
pessimists were confounded.

Never has an Australian colony employed a better public
servant. It was his brain that enabled Forrest, by public
works built with British capital, to remove the great
natural impediments to colonization in the south-west
corner of the continent. Yet his death is additional evidence
of the breaking strain that a centralized economy must
impose on its most capable men. He had been in the
colony’s service less than eleven years when at the age
of 58 his spirit of tempered steel was broken.

The Coolgardie, or, as it is now called, Goldfields Water
Supply, though for a time a financial burden on the revenue,
has been more than an engineering success. Both the
critics who loudly proclaimed it needless and extravagant,
and the optimists who expected it to make possible the

^ Among the sceptics one of the most persistent was J. H. Curie, in his
Gold Mims of the World, Sec first edition (1899), p. 154, and second edition
(1902).

BACK TO COLONIZING

355

real greatness of the mines, missed its true value. Here,
as in the eastern colonies, gold brought people but could
not hold them. Indeed, world-wide monetary changes
drove them out of gold-mining much more quickly in
Western than in Eastern Australia. The trading world was
being supplied with so much gold by South Africa, Western
Australia and the Klondike after 1896 that its value, as
measured in commodities, went steadily down, i.e. prices
of goods as stated in gold-units went up. As soon as this
rise in gold prices offset such particular economies as the
cyanide process of producing it, the Western Australian
mines were limited to richer ore by the rise in general
costs. Those of Victoria had been helped to survive by
falling costs in the ’seventicj and ’eighties. Thus the change-
over to agriculture had to be made quickly in the West
if the state was not to lose its ex-miners more rapidly
than Victoria had done.

It was well that Sir John Forrest had made a lifelong
study of the land problem. In 1892, before Coolgardie
arose, he had introduced a Homesteads Bill to enable
the government to assist settlers by loans up to half the
value of the improvements needed to turn virgin land
into farms. At first, prejudice against state interference
was too strong for him, but in November 1894 an Act was
passed establishing the Agricultural Bank. Using ^ 1 00,000
of trust money as its capital, the Manager of the Bank was
to make advances of not more than ^^400 each to enable
new settlers to ringbark and clear their homesteads.
Within areas of safe rainfall they might well grow some
of the farm produce which the colony was then importing
to the value of half-a-million a year from the eastern
colonies. Under careful and conservative management
the Bank felt its way for eight years.^ Early in the new
century, however, when gold-mining showed signs of

1 The Agricultural Bank and Industries Assistance Boards by Gordon Taylor
(1921), though marred by some immature judgments, gives a valuable
r^sum6 of the development of government credit to farmers in W. Australia.

23-2

BACK TO COLONIZING

356

waning, two or three vigorous spirits among the colony’s
public men realized that superphosphate and the other
new wheat-growing methods of Eastern Australia could
be applied with unusual chances of steady success over a
broad belt of lightly-timbered country, of mottled quality
but safe rainfall, stretching from Gerald ton towards Albany
and eastward as far as Southern Cross and perhaps
Esperance. They seized upon the Agricultural Bank as a
means of providing government money by which anyone,
ex-miner, civil servant or immigrant, might clear and
equip a wheat farm. The category of improvements for
which advances were to be made was widened, and such
advances were allowed up to the full value of such
improvements.

Almost equal in importance to the Agricultural Bank’s
advances, in this transition to agriculture, was the aid
given inMthe new wheat areas by the Goldfields Water
Supply. At first it had relied for financial support on its
services to the mines and goldfields towns, but nowadays
farms and wheat-handling towns draw water from it along
two-thirds of the pipe-line.^ Rapid settlement, as in the
Victorian Mallee, was made easily practicable in country
where, during summer, water for stock and domestic use
had been hard to find. O’Connor had builded better than
he knew. Over a far wider range of country, north and
south of the belt which the pipe-line crosses, one of
C. Y. O’Connor’s lieutenants, P. V. O’Brien, has provided
water supplies piecemeal by a more economical method,
conserving the water around the granite bosses that occur
like natural roofs throughout the south-west of Western
Australia. By low retaining channels around the base, the
rain-water is led into covered dams of considerable size.
In other instances wells at favourable spots have revealed
unsuspected sub-artesian supplies. By such ways much of
the land that seemed utterly inhospitable in the ’nineties

^ “In 1925-6 the Railways consumed 8 per cent., the mines 22 per cent,
and ‘other’ 70 per cent, of the water supply.” C,T.B, no. 20, pp. 136-7.

BACK TO COLONIZING

357

has been made the scene of agricultural settlement or,
farther out, of light pastoral occupation.

Under the brave rule of Forrest, Western Australia thus
began a recapitulation in an artificial setting of the
main themes of Australian colonization. Superphosphate
and the acclimatized wheat-farming of the Eastern States
enabled the immigrant “t’othersiders’’ and a new generation
of ‘‘gropers” to break the spell ofher long pastoral slumber.
But that dramatic awakening of the Swan River colony
seems to have exhausted the capacity of Australians to
colonize in the old makeshift, venturesome fashion.

The planters’ dreams of a separate North Queensland
had come to nought, and South Australian ambitions to
plant a tropical sub-colony in the Northern Territory
ended in costly failure. Forts Dundas and Wellington
were abandoned in 1824 1827. Another defensive

post under naval auspices lasted at Port Essington
from 1838 to 1849.^ Grawfurd, the Administrator of
Singapore, wrote of the North Australian coast that, owing
to the uncertain character of the monsoon, he could not
conceive a tropical locality more unfavourable to cultiva-
tion. Yet in 1864 the South Australians projected its
official development from a “first town” on the coast,
around which small farming areas and pastoral estates
would be sold and leased on the good old Wakefield plan.

Pastoralists had indeed trekked from the south and east
into the high inland country. Some had followed the
South Australian explorers, Stuart and McKinlay; and in
spite of the resistance of Newcastle, the Secretary of State,
the whole territory, save a strip known as the Albert
district southward from the Gulf of Carpentaria, was
assigned to South Australian government. Quarrels be-
tween the officials sent to determine the site of the “first
town”, delays in the survey of land and the defection of

^ The following paragraphs owe much to the Cambridge History of the
British Empire^ vol. vii, ch. vi, “ Experiments in Colonization ”, by A. Grenfell
Price.

358 BACK TO COLONIZING

a North Australian Company, made up a record of
blundering that was not expunged by Surveyor-General
Goyder’s choice of the fine harbour at Port Darwin and
rapid survey of 600,000 acres on the tableland behind. But
it was not only initial errors that “damned the Northern
Territory”; as subsequent events showed, the permanent
disabilities of soil and climate counted for more. It was
ibsurd, in any circumstances, to attempt its government
from the colony farthest from it by sea, the only means
of communication then available. Newcastle, who saw
this, acted unwisely in sanctioning an absurdity.

The leaders in South Australia sought in 1870 to correct
this weakness by a telegraph line joining their northern
and southern territories. The projectors of a submarine
cable proposed that the colonies should co-operate in the
construction of a land-line from Wentworth near the
Darling"- WRirray junction to Burke town on the Gulf of
Carpentaria; there it would meet the terminal station of
the cable they were to lay from Singapore. On his way
to Melbourne, an emissary from the company asked at
Adelaide whether South Australia would facilitate its
operations if Port Darwin were made an intermediate
station.

Premier Strangways was eagerly favourable. His govern-
ment would either guarantee the cost of constructing or
would itself construct an overland telegraph line along
McDouall Stuart’s track from Adelaide to the north
coast. According to Charles Todd, the Superintendent of
Telegraphs, such a line would cost 120,000. While the
negotiation was proceeding, John Hart displaced Strang-
ways as Premier, and, being a more cautious financier,
reverted to the plan of co-operating with the other colonies
on the Wentworth-Burketown route. The House of
Assembly, however, was not to be baulked of the prize
and insisted that South Australia should at least offer to
shoulder the full responsibility. As a result the province
undertook to finish the line from Port Augusta to Port

BACK TO COLONIZING

359

Darwin before the end of 1871. It was expected to ‘‘promote
the success of the new settlement at Port Darwin as well
as the occupation of those large tracts in the interior
which are suitable for pastoral occupation

Four days after the reception of the company’s acceptance
of this offer, the government rushed a Construction Act
through both houses, the “house of review” doing its part
at a single sitting. Within the next month contracts were
duly let for the three sections into which the line was
divided. A year later, news reached Adelaide that the
contractors for the northern section had failed. The ener-
getic Todd was sent to fill the gap; he did it, but the
total cost mounted up to ;;^420,720, more than ;^300,ooo
above the first estimate. The line was completed by
22 August 1872. The cable company, as Adelaide no
doubt expected, saved itself the expense of a cable
between Port Darwin and Burketown, so that the
province secured “the monopoly which”, so she said,
“South Australia had scarcely coveted and certainly has
not striven for”.

Power to send messages at a shilling a word from
Adelaide to Port Darwin did not, however, solve the
Territory’s problem. More formidable obstacles to tropical
agriculture remained in the climate, soil and lack of labour
in North Australia. Post holes for the telegraph line
revealed gold at Pine Creek in 1871, and in the following
year there was an attempt to mine by companies there.
But costs were phenomenal, and men would not stay save
at such high wages that “ounce stone” showed no margin
of profit. The heat was terrific. Chinese coolies were
brought from Singapore to work for the companies, but
these collapsed and the coolies tried their luck at mining
for themselves in a primitive fashion along the Margaret.
They were “a poor diseased lot of creatures”, pirates and

^ S.A. Pari. Papers i no. 24, 1870-1, House of Assembly. See also no. 38,
1870-1, both Houses. Correspondence finally fixing Port Darwin as
terminus of cable from Europe.

36o back to colonizing

port rifF-rafF. Gold had brought no permanent white
settlement.

Perhaps a transcontinental railway would bring the
settlers. As Far back as 1862 a Port Augusta Overland
Railway Act had authorized the government to negotiate
For an overland railway to be built on the land-grant
principle.^ No efFective ofFer to do so was made during the
five years oF the Act’s currency. Talk oF state construction
arose in 1877, but parliamentary opinion was almost
unanimous that the Territory must first be developed and
made prosperous by coloured labour beFore anything so am-
bitious as a railway were undertaken. A Northern Terri-
tory Immigration Act passed in 1879 Failed to obtain the
Queen’s assent. The Indian Government had made repre-
sentations that the provision it contained For the welfare
of coolies was inadequate. That government stipulated
that such a Measure should protect Indian coolies through
an officer responsible to itself. In 1882 a further Act
embodied this principle, and in the year following the
Palmerston and Pine Creek Railway Act authorizing state
construction passed both Adelaide houses amid enthusiasm.

Little came of all this. Drought and financial stringency
tied the Adelaide Government’s hands. Opinion in other
colonies was very adverse to the introduction of coloured
labour. The Indian Government waited for the appoint-
ment of the protector responsible to itself before it would
permit the recruiting of coolies. In 1887 the Pine Creek
Railway was begun with Chinese coolies. It made no
difference. The country along the line was as empty when
it was finished as before it was begun. The Chinese had
been brought under indentures for railway building and
‘‘evaporated” when it was built. A southern section from
Marree above Port Augusta was built as far north as
Oodnadatta, 688 miles from Adelaide, between 1878 and
1891, when once more lack of loan funds called a halt.
A gap of 1063 miles remained.

^ H. A. Parsons, The Truth about the Northern Territory ^ Adelaide y y passim.

BACK TO COLONIZING 361

The advocates of tropical agriculture as the key to the
development of the North were not silenced, though
plantations failed through neglect at Delissaville in 1882, at
Manton Hill on the Adelaide River in 1 884 and at Shoal Bay
from 1885 to 1890. Sugar-cane, coffee plants and rubber
trees throve despite long periods of neglect. This was true,
but men will not tend tropical plantations which cost
more than they produce. Some still argued that cheap
indentured labour would show a margin of profit, but
others pointed to the poor soils of the Territory, mainly
weathered from sterile sandstones and watered by summer
rains alone. Why should men cultivate these in preference
to the Queensland coastal strip, whose richer patches
enjoyed rains at all seasons?

The dream of tropical agriculture by means of coloured
labour faded as federation dawned. Queensland planters,
on the defensive against the new political labour move-
ment in North Queensland, offered to transfer their mills
to the Territory if guaranteed coloured labour for twenty-
one years. The Chief Secretary shook his head. In the
coming Federal Parliament both houses were to be elected
by the widest suffrage.

Federation meant stagnation to the Northern Territory
so long as the state of South Australia continued to ad-
minister its scanty affairs. It was an empty land. There
was a port in outline at Darwin. A few Chinese fossicked
for gold. The population had been 5366 in 1890: in 1909
it was 3538. Cattle exports had expanded from 20,495
to over 100,000 a year during that period. But what was
such a trade as a basis of taxation to provide interest on
a debt of £2,748,063? In 1909 South Australia washed
her hands of the business with relief. ‘‘ It is obvious ”, wrote
H. A. Parsons, '‘that it will not pay to grow any tropical
products in the Northern Territory with white labour for
export in competition with the productions by coloured
labour of other countries”. But though leaders might be
concerned about the empty North, the man in the street

362 BACK TO COLONIZING

was little interested in a place “not on his map”. Through-
out federated Australia men acquiesced in the restriction
of settlement and industry to areas and enterprises which
would provide white Australians with a defined and state-
guaranteed standard of living. To the realists this was the
substance of the White Australia decreed by the Common-
wealth.

BOOK THREE
THE COMMONWEALTH

CHAPTER XXI

o_4._o

The Origins and Extension
of W age-F ixing

YDNEY or the bush!’’ cries the Australian when
he gambles against odds, and the slogan betrays
a heart turning ever towards the pleasant coastal
capitals. But the percentage who found industrial employ-
ment— predominantly a city category — diminished after
the bank smash from 30*7 in 1891 to 26*1 in 1901. Building
and construction work in and around the cities were dead.
Factories cut down their staffs. Bush- venturing on farms
and alluvial diggings had a fresh innings; but there were
still too many in the towns. Trade unions fell to pieces or
stood shrunken and powerless. Their defeats in the early
’nineties, attributed by their leaders to class-antagonism
in high places, had borne witness to Lane’s foresight in
trying to unite town and country labour and to bring
unskilled as well as skilled men within his Australian
Labour Federation. For their deadliest foes during the
struggle had been the as yet unorganized labourers. Yet
unionists knew full well it was the scabs’ poverty, not their
will, which had made them consent to fight capital’s battle.

The solution, said Spence, was to spread trade unionism
throughout the length and breadth of Australia. On the
old lines of craft benefit societies this would take time and
long endeavour. The ‘‘new” way of propaganda by strikes
had not prospered. Political action would cost less. The
traditions of British unionism were against it, but Graham
Berry in 1884 had advised the second Intercolonial Trade
Union Conference to ‘‘make labour’s voice heard in the

S66 THE ORIGINS AND

councils of the nation”. The Conference had contented
itself with a parliamentary committee, to watch over the
passage of measures beneficial to labour. During and after
the great maritime and pastoral strikes, however, friend
and foe alike bade them regard the ballot as the proper
means of righting wrongs, and in the bitter hours of weak-
ness and isolation Labour took up this challenge and
resolved to send artisans to speak for artisans, miners
to represent miners. These might some day seize the
machinery of government which had beaten them down.

In New South Wales, members of the Legislative As-
sembly were to be paid for the first time after the election
of 1891. With energy unimpaired by poverty, the unionists
formed Labour Electoral Leagues and enlisted such general
support that thirty-six of the forty-five candidates en-
dorsed by the Trade Union Council won seats in Parlia-
ment. To ftie gifted correspondent of The Times^ the new
party might seem cursed with “inept chatterers at the
head and larrikins at the tail”, but her appraising eye
valued highly its main ranks of determined men who
resented unearned vicissitudes of pay and living. As yet
they had no leader, no policy that they could call their
own, and their ways in Parliament were clumsy.

Sir Henry Parkes, a man of the people leading his fifth
government, accepted their support but found it irksome —
“given after a manner of their own, as an ungracious man
gives charity”. In October 1891 he refused to proceed
with a Coal Mines Regulation Bill because his allies had
thrust into it a clause making eight hours the legal day’s
work underground. One of his lieutenants harped upon
supply and demand. “That”, retorted a mining member,
Fegan of Newcastle, “is a principle we do not recognize
and in the opinion of all readers and thinkers it will not
survive very long.” Parkes gave up ofiice for the last time
rather than enact restriction. With leonine mien and his

^ Miss Flora Shaw, afterwards Lady Lugard, in her Letters from Queensland
(1894).

EXTENSION OF WAGE-FIXING 367

surprising high voice, the old statesman bade the defiance
of his generation to the new power. “ Civilization would
lose its charm and value if it did not lighten the burden
of the masses of humanity. But I distinguish very broadly
between eight hours being sufficient for a man to labour
and Parliament presuming to say how many hours he
shall labour. The working classes of this country are
sufficiently strong to make good — ^indeed they have made
good — their right to work eight hours without asking
Parliament to exercise a power which in all moral justice
it does not possess. . . . Tyranny is an arbitrary interference
with your fellow-men and whether it is in the guise of a
trade-union or the edict of an autocrat it is tyranny just
the same.”

His successor, Sir George Dibbs, broke up the inex-
perienced Labour group by raising the fiscal issue.
Their ranks were further tom by recriminations over the
very pledge of solidarity in the division lobby by which
they sought to close them. The party’s candidates fared
badly at the elections of 1 894 and 1 895. A leading member,
Joseph Cook, joined Reid’s free-trade ministry as Post-
master-General. Yet the main body regained the balance
of power in 1895, and when, after five years fruitful of
liberal reforms, Reid demurred at further concessions in
return for support, it nipped in the bud his ambition to
be first Federal Prime Minister. Then it proceeded to
squeeze a protectionist ministry under William Lyne.

The Labour Party had in these years learned much.
From being “an impotent group of hysterical, blocking,
unpopular intransigents”, it had become “a compact
body of artful parliamentarians who knew how to drain
the last drop of reluctant honey from the Reidite hive”.^
But it was still fumbling in search of a distinctive pro-
gramme. In January 1895 the “Solidarities”, as the core
of the party called themselves, adopted six new planks at
the Political Labour League Conference. The first urged
^ T. A. Coghlan, Labour and Industry in Australia^ p. 218,

THE ORIGINS AND

368

extension of government ownership and operation of “such
works as railways, tramways, water-supply, public lighting
or other works for the good of the community”. After such
extension their parliamentary power might dictate the im-
provement of wages and working conditions for all state
employees. The sixth new plank was “Compulsory
Arbitration”.

This plank told of a changing balance of power both
’in the political and in the economic spheres. Unionists
foresaw the coming of governments unlike those which
had outlawed them in 1890 and 1891, and the prospect
has softened the antagonism of miners and shearers to
government intervention in industrial disputes. But it was
with reluctance that they admitted the claim of the com-
munity to be the dominant party in such disputes. Lane’s
and Spence’s federated unions had practised negotiation
with the jjnployers, though rather as an art of bluffing
enemies than as an adjustment of sound relations between
partners in a joint service of the public. They had relied
on the strike as the final arbiter in the war of the classes.^
But the association in point of time of the great strikes
with the looming of financial chaos had made the strike
weapon profoundly unpopular throughout the land. Every-
where men discussed plans of pubhc action to prevent the
appeal to force. Should public intervention take the form
of conciliation — the good offices of disinterested men,
nominated and paid by the state — or of compulsory
arbitration after the fashion of the criminal courts en-
forcing the king’s peace? Till 1894 all such proposals
were coolly received by miners and shearers as well as
by employers. The latter thought any state action likely
to tie their hands lately freed, as they imagined, by the
victory of “freedom of contract”. The unions still thought
themselves equal to renewing the battle.

^ In W. G. Spence’s Australians Awakenings ch. xxxii, “Trade Unionism”,
may be read the old leader’s naive advice to union negotiators. It would
be amusing if it were not so sinister in ignoring the need of sound principles.

EXTENSION OF WAGE-FIXING 369

The trend of prices, however, was strongly against the
men. Without consulting the A.W.U., the Pastoralists’
Federal Council imposed in 1894 ^ agreement, re-
ducing the piece-rate to iys» per hundred for machine-
shorn sheep, and making each pastoralist sole interpreter
of his agreement with shearers. The union leaders, power-
less to say them nay, tried to save their own faces by a
conference. The pastoralists refused it. Into strike camp
went the shearers, as in the brave days of Lane. The station-
owners promptly fetched non-unionists by the hundred
from Victoria, Tasmania and New Zealand and filled the
stands. Riots flared here and there. A river-steamer,
the ‘Rodney’, carrying non-unionists up the Darling, was
burned to the water’s edge at Pooncarie. Wool-sheds, too,
were burned at Ayrshire Downs, Cambridge Downs,
Cassilis, Manuka and Dagworth in Queensland.^ The
Nelson government therefore proclaimed a state of insur-
rection and the camps scattered.

In New South Wales, while the commotion still boiled,
Williams, the A.W.U. President, appealed to the new
Premier, G. H. Reid, to compel the disputants to confer.
Reid asked first for a guarantee that disorder would cease.
It was not given. An elaborate offer by the A.W.U. to
settle on the wages of 1891, and individual bargains at the
sheds on other matters, drew the scornful rejoinder from the
pastoralists that “as it has already appeared in the news-
papers it calls for no further reply”. The union’s funds
ran low, and supplies of non-unionists were inexhaustible.
Its own men left the strike camps to find work on the
pastoralists’ terms at other sheds. The strike died out.

It was after this experience of supply and demand that
the A.W.U. joined in adopting “Compulsory Arbitra-
tion” as a Labour plank. Its own rough power to impose
“restrictive conditions on the trade, business or industry
of the members” having waned, it sought the aid of the

^ M. M. Bennett, Christison of Lammertnoor^ pp. 1 93-200, 215. The note
on p. 197 refers to the strike of 1891.

370

THE ORIGINS AND

staters power of legal compulsion. Ever since 1891 Charles
Cameron Kingston, a South Australian radical intimate
with Labour, had pleaded for a compulsory registration
of unions of employers and employed and for the enforced
reference of their differences to a ‘‘Court”. In 1894, after
three abortive attempts, he succeeded in carrying through
the South Australian Houses a Conciliation and Arbitra-
tion Act embodying, though ineffectively, this principle
of compulsion. The awards of the State Board were only
to bind the parties to the dispute submitted to it.

Kingston’s compulsory arbitration in the name of in-
dustrial peace, adopted in 1895 by the New South Wales
Labour Party as a new plank, became at once an important
issue in Australian politics, second only to that of the
federation which was to prepare a wider scope for its
triumphs. Reid fell from the height of his power because
he would ^TBiot grant the new province to law and order.^
He was willing to compel the parties to a dispute to confer,
but would not enact the legal enforcement of an arbi-
trator’s award.

For five years after Labour’s conversion opinion among
employers remained adverse. Reid’s mild Bill in 1895 for
compulsory conferences seemed to the Sydney Morning
Herald “extreme and one-sided legislation calling new and
highly unfair powers into existence”. The Legislative
Council gave its second reading short shrift by thirty
votes to one. But in 1896 a renewal of turmoil at the
Newcastle coal mines preyed upon the public’s nerves.
Victoria had set up minimum wages boards in that year.
New Zealand also had set up a compulsory arbitration
court as the coping stone of a system of state conciliation.
That was the year, too, in which the sinking prices which
had troubled the economic world since 1873 touched
bottom. Unconscious that a heavier gold production was
at last causing buoyant markets, men readily attributed

^ T. A. Goghlan, Labour and Industry in Australia, pp. 2105-9, and G. H.
Reid’s Reminiscences, p. i88.

EXTENSION OF WAGE-FIXING 371

success to the experiments in New Zealand and Victoria.
A commendation of the New Zealand Court by the Chair-
man of the Union Steamship Company,^ the leading
employer of that colony, did much to persuade Sydney
to acquiesce in an extension of the experiment to New
South Wales. When Bernard Ringrose Wise, Lyne’s At-
torney-General, introduced his Arbitration and Concilia-
tion Bill in 1900, he put it forward as ‘‘an experiment
designed to overcome evils the gravity of which we are
fully acquainted with, and which cannot possibly bring
in its train other evils at all equal to those it is intended
to do away with”. Labour and middle-class opinion
applauded his optimism when he asserted: “There cannot
be a strike under this bill, lucre may be disputes but there
cannot be any interruption of industry”. The Legislative
Councillors were not so sure, but in the calm after the
campaigns for federation they let it pass.

To attain industrial peace, that heaven of all men’s
wish, Wise’s Act of 1901 went further than Pember
Reeves’ New Zealand variant on Kingston. The New
Zealand measure prohibited strikes and lock-outs only
when one party to a dispute had appealed to the Arbitra-
tion Court and while the appeal was pending. The element
of legal compulsion came in ostensibly as a last resort, a
weapon in reserve when the parties would not agree upon
a settlement. The whole purport of the New Zealand Act
was to lay emphasis on conciliation — the original aim
of all this legislation. Collective bargaining, through in-
numerable brains, would continue to adjust the flux of
prices and terms in which the values of men’s services to
one another were registered from day to day. But events
did not work out thus, even in New Zealand. Disputants
often brushed aside the boards of conciliation and sought

^ Mr (afterwards Sir James) Mills was reported by the Sydney Daily
Telegraph, 3 July 1899, to have said : “ I think this method of settling disputes
is, on the whole, satisfactory. Under the operation of the Act the parties
can meet together and after a little discussion the strength of each case
can be pretty well judged”.

24-2

372 THE ORIGINS AND

to present an unprejudiced case before the bench armed
with compelling power. Let the Court make their col-
lective bargains for them.

This subtle but all-important change in the atmosphere
of business was not lost on the sensitive brain of Wise. In
a colony where, as he thought, it seemed “a permanent
condition of industrial enterprises that there shall be a
^perpetual liability to industrial strikes”, his Act uncon-
ditionally prohibited strikes and lock-outs pending con-
sideration of every dispute by the Court. By it a strike
or lock-out became a misdemeanour against society. It was
immaterial whether the parties applied for an award or no.
Existing terms and conditions of employment could not
be disturbed at the will of one party alone. With one sweep
the New South Wales Arbitration Court threw its sanction
over the terms upon which, when the Act came into force,
men were^^employing and serving one another. The as-
sumption, implicit in the New Zealand Act, that a legal
tribunal was competent to direct every needed adjustment
in the conduct of business and that at its bidding peace
would bless the Court’s decision, became more positive in
New South Wales. The Supreme Court, possibly with raised
eyebrows, ruled that the Arbitration Act “deprives the
employer of the conduct of his own business and vests the
management in the tribunal formed under the Act”.

Victoria was not so bold. There “union rates and con-
ditions ”, though still proclaimed, were hopeless of achieve-
ment by industrial action and the Labour group in Parlia-
ment was weaker. Its sway of the balance in the Assembly
was enough, however, to exact from Turner the establish-
ment of minimum wages boards. Their machinery was
simple, their aim immediate. The helpless poor congre-
gated in Melbourne after the collapse of the boom were
being exploited as out-workers by clothing and other
manufacturers. Factory laws were no new thing in
Victoria, though they had not yet regulated wages. As
early as 1882, The Age had been shocked to find low wages

EXTENSION OF WAGE-FIXING

373

and evil conditions in the protected industries it had fought
so hard to rear. An Amending Factory Act of 1885 had
prescribed better conditions of space, sanitation and safety,
and had set public inspectors to enforce them. Probably
a House of Lords investigation into the sub-letting of
piecework at “sweated” rates to East London home-
workers gave the Victorian Labour leaders their fresh cue
in 1895. A sharp agitation by The Age against sweating,
understood more widely as home-working, was answered
by evidence that such work was all too general in the over-
populated capital and too essential in eking out family sub-
sistence to be declared illegal. The Legislative Council and
Assembly conferred and agreed upon (i) the establishment
of minimum wages boards representing both sides under
official chairmen, to fix legal piece and time-wages in the
clothing, furniture, baking and butchering trades, (ii) the
making of a register of home-workers, and (iii) “poheing”
of wages board determinations by the official factory
inspectors. Though modelled on conciliation boards, the
new machinery was not explicitly directed against strikes;
the Act did not declare them illegal. The home-workers
were too helpless to fight. No dispute or threat of a dispute
was needed to call a board into existence. Nor did the Act
require the incorporation of industrial unions of employers
and employees as juristic units for a formal litigation,
as the Acts inspired by Kingston did. The boards brought
representative employers and employed face to face in
order to set up limits below which the state might forbid the
purchase of service at prices which offended public opinion.

The new method did, however, promote labour organisa-
tion in providing for regular negotiation. The election of
representatives to sit on the boards brought scattered
workers together, and thus eliminated any weakness due
only to their dwelling apart. Its piecemeal extension
waited upon the ripening of opportunities. A resolution
of either House of the Legislature might create a fresh
board. For a time the enforcement of determinations was

374 the origins AND

dubious. The task was hardest in the furniture trade where
Chinese masters and men were too inscrutable for the
inspectors. But the danger that the determinations might
restrict employment was offset by rising prices, and by
the exodus, mostly to the goldfields, of 63,582 Victorians,
of whom 39j^05 were males, during the quinquennium
1896-1900. The first fear of wage-fixing quickly faded.
/Df thirty-eight boards established prior to 1906 eleven had
been applied for by employers, the best of whom welcomed
restraint upon hard taskmasters. An attempt in 1904 to
limit the boards’ option in defining minimum wages to the
average paid by “reputable employers” proved short-
lived; it was abandoned two years later. The average is
not always divine. Boards numbered 186 at the end of
1927* The only check upon their determinations was a
Court of Industrial Appeals which might review and upset
determihaifons not legally arrived at, and exercise for the
nonce all or any of a board’s powers.

William Lane had endowed the Queensland Labour
Party with an early strength which was to carry it to
the ministerial benches even before federation. Before he
set out for his New Australia in Paraguay, Labour was
represented by fifteen members in the Assembly (1893).
Yet the very success of Labour in elbowing aside the
radical party and taking from the first the direct opposi-
tion benches put out of possibility the fruitful method
of “support in return for concessions” pursued in the
southern colonies. As a result, legislation to set up in-
dustrial courts made a slow start in Queensland. Else-
where such laws were the work of individual Liberal
leaders, such as C. C. Kingston, Pember Reeves, B. R.
Wise and Alexander Peacock, rather than of Labour con-
ventions or caucus. For six years the Queensland Labour
Party gained nothing but parliamentary experience in a
hard school. Then, on i December 1899, they had the
honour to form the first Labour Government, under Ander-
son Dawson. It held office for only six days. In 1908 a

EXTENSION OF WAGE-FIXING

375

coalition ministry, led by William Kidston, who had been
Dawson’s Treasurer, but was no longer a Labour leader,
adopted the Victorian Wages Boards (8 Ed. VII, No. 8)
and to these in 1912 a Liberal Government added a Court
of Industrial Appeals by an Industrial Peace Act (3 G. V,
No. 12). On its accession to power in 1915, the Labour
Party lost little time in exchanging the wages board
method for a Court of Industrial Arbitration (1916). Of
the less populous states, Tasmania and Western Australia,
the former has followed the Victorian Wages Board
methods, while Western Australia has made consistent use
of a Court of Arbitration, first successfully established in
1902. Its supervision of apprenticeship has been notably
thorough and sound undei the care of W. Somerville, the
workers’ representative since 1905.

After 1907, in a Commonwealth tribunal, a greater man
than Kingston had elaborated a principle of wage-fixation
which led boards and courts alike to interpret the wage-
earners’ share in production as a sacrosanct family main-
tenance. An American observer who reviewed the Aus-
tralian Labour movement in 1906 found in it “something
of the Chinese jealousy of the outside world, of the
parochial spirit extended to a continent ”,i and held that
this weakened its moral appeal. In 1907, however, a Judge
of the High Court of Australia, presiding over a Federal
Arbitration Court, took high moral ground in claiming for
the workers a wage independent of supply and demand.
A glow of idealism warmed what had seemed a class
egoism. Aided by many outside the union ranks. Labour
rose to power in both states and Commonwealth, ex-
pecting and expected to reconstruct the Australian economy
on the firm basis of a legal living wage.

The Convention which drafted the Commonwealth
Constitution had inserted among the subjects with respect
to which the new legislature might make laws for the peace,
order and government of Australia “Conciliation and
^ V. S. Clark, op, cit. p. 291.

376 THE ORIGINS AND

arbitration for the prevention and settlement of industrial
disputes extending beyond the limits of any one State
The regulation of industry remained a state responsibility,
but memories of the great strikes and of the dark days
that had followed had bitten deep. Men reasoned that the
new Government alone could wield effective powers to stop
the paralysis of callings such as the pastoral, which knew
po state boundaries, and the maritime, the ships of which
plied beyond them. Out of a stormy passage through the
Federal Legislature there emerged in 1904 a Common-
wealth Conciliation and Arbitration Act. Three Federal
ministries had died during the drafting of its provisions,
and the decisions and personnel of the Court it called into
being soon became the main matter of political argument
throughout the Commonwealth. Here Labour found its
programme.

Henry' Bournes Higgins, as Convention delegate and as
legislator, had been chiefly responsible for the creation of
the Court, and, by renovating as a novel extension of
democratic jurisprudence the mediaeval ideal of the just
price, he was now to show the Labour Party the path it
had sought by which those on whom had fallen the
sharpest pains of adversity might reach a just and reason-
able security. The ideal, transmuting the old rations habit
and the instinctive solidarity of men facing a trying
climate, soon caught the national imagination.

Immediately on his appointment in 1907 as second
President of the Court, Mr Justice Higgins had to decide
whether the wages and conditions of work in H. V.
McKay’s harvester factory could be held “fair and
reasonable” and could thereby entitle its products to
exemption from the excise duties imposed by a new Excise
Tariff Act (No. 16 of 1906). ^ The learned judge reasoned

'■ Constitution Act, section 51, subsection xxxv. As to the hesitation over
the insertion of this subsection, see G. Anderson, Fixation of Wages in Australia,
pp. 128-9, ^ very valuable work of reference.

* See H. B. Higgins, A Mew Province for Law and Order, passim-, a Common-
wealth Arbitration Reports, p. i ; G. Anderson, op. cit. pp. i88 et seq.

EXTENSION OF WAGE-FIXING 377

that, as the Act offered exemption from excise duties to
those employers who paid “fair and reasonable” wages,
it must mean by these words something more than the
level set by the “barbarous” higgling of the market. He
decided that “the primary test in ascertaining the minimum
wage that would be treated as ‘fair and reasonable’ in
the case of unskilled labourers” must be “the normal
needs of the average employee, regarded as a human
being living in a civilised community”. After some in-
quiries into the costs of a workman’s household of about
five persons, he named ys. a day, 4.2s. a week, as the lowest
wages that he could certify to be fair and reasonable.

The Excise Act was soon afterwards held to be invalid
on constitutional grounds; it was beyond the powers
entrusted to the Federal Legislature. But the “Harvester
judgment” could not be expunged from men’s minds. It
was acclaimed at once as the much sought eirenicon, the
way of industrial peace for which arbitrators and boards
had so long been groping. The tide of opinion, which had
been running in favour of wages boards as being less
provocative of “ disputes ”, turned again towards Courts
of Arbitration. New South Wales, after changing in 1908
to a wages boards plan, returned to a mixed one of courts
and boards in 1912. Several state legislatures embodied
in their industrial codes the inspiring words “the normal
needs of a human being living in a civilised community”
— with local variants. Yet the nation-wide realization of
this standard by state tribunals was hampered by fear of
inter-state competition, a fear which could not be laid
as long as any important state, such as Victoria, failed to
impose the new doctrine on its wage-fixing tribunals.

The power of the Federal Court to enforce as well as
proclaim the eirenicon was limited. It could hear only the
parties to disputes extending beyond any one state.
Unions with inter-state affiliations could overcome that
limit by extending their disputes. But the capacity of the
federal tribunal to hear parties was also finite, and the

THE ORIGINS AND

378

High Court, as interpreters of the Constitution, restrained
its action. An award bound only the parties to the specific
dispute, and could not be made a common rule. Some-
times it was practicable with the aid of the six Australian
directories to cite every employer in every state as a
respondent; but this was at all times costly. For fourteen
years (1906 to 1920) it was held by the High Court that
|he Commonwealth Arbitration power did not extend to
fixing the wages and conditions of employees on the rail-
ways and other industrial activities owned by the state
(i.e. provincial) governments. These, thought the majority
of the High Court Justices, were state instrumentalities.
To control them, it was then held, would be inconsistent
with the freedom and financial responsibility of the states.^
Awkward situations arose, too, from the overlapping of
state and federal jurisdictions and the zeal of employees
to make the rival courts compete to be fair and reason-
able.

Four times federal ministries have appealed to the
nation to confirm by popular vote constitutional amend-
ments designed to give the Commonwealth more control
over industry. The reasons for the repeated rejection of
such proposals, though made by governments of all the
political colours, are matters for political rather than
economic history. The fact of rejection has made the
process of re-shaping wage-standards to the ideal of fairness
and reason a complex and litigious business. Yet both
the process and the ideal have grown in strength.

At the time of its promulgation the Harvester wage of
4.2s. was a bold step forward. Its general adoption pro-
mised relative plenty to those who had come through
great tribulation. In 1907 unskilled men in regular
employment were getting, on an average, 335-. a week.
Some wages boards had fixed 30^. a week as the minimum.

^ An article in the Round Table, vol. n, pp. 358 et seq., written in 1911,
indicates that the reversal of decisions restraining the federal control of
industry was expected almost as soon as those decisions were given.

EXTENSION OF WAGE-FIXING 379

Carters and drivers were getting 25J. for a week of 56
hours. The advance was consolidated between 1907 and
1914 by two out-works of federal and state regulation.
One was the inclusion in the awards of grades higher than
the unskilled day labourer. The other was the adjustment
of the wages legally awarded so that they should be fixed
real wages, not mere nominal wages stated in a money
whose value was falling.

The Victorian boards, set up as a means to prevent
sweating, were originally confined to the tasks of defining
the minimum wage and conditions of apprenticeship. But
the power to fix wages implied power to fix overtime rates
and so by further implication the length of the working day.
Their determinations, nevertheless, were of the baldest sim-
plicity. The Arbitration Courts, interpreting more boldly
their mission to settle disputes, felt impelled to lay down
not only the “basic wage”, as “a wage below which
employers ought to be forbidden by the State to employ
its citizens who are labourers”,^ but also to safeguard the
advantages of the skilled men by awarding “secondary
wages” or margins for skill. The fear of discontent was
held to justify awards of the same basic wage in different
industries, on the ground that unequal wages were
“anomalies over which men brood”. That extended it
laterally to labourers in all industries. In other awards
that fear did not prevent the grant of generous margins
to machinists of high specialization “however much
specialization tends to monotony, to industrial discon-
tent”. This set up a competition for margins. The con-
ception of the margin for skill was joined with that of
“just minimum time wages” in finding a fair and reason-
able piece-rate for shearers. “Having found that the
shearer should, as a ‘skilled worker’, get a net wage of
,^3 per week for the time of his expedition to the sheep
stations to shear, and that a rate of 24s'. per hundred sheep
would give this net result, the Court fixed 24s. per hundred

^ Higgins, J., Meat Industry Employees' Case, 1916, 10 C,A,R. pp. 482-4.

38o the origins AND

as the minimum piece-rate. Allowances had to be made
for days of travelling and waiting, expenses en route, cost
of mess, and combs and cutters”,^

The threat of industrial discontent was a trump card in
this process of extending the sway of judicial arbitration
over all wages, conditions and hours of labour. At times
the second President resisted the finer drawn distinctions
by which union advocates claimed secondary wages for

skilled labourers” or for the handling of special cargoes
by wharf-lumpers.* But the dripping of water wears
away the hardest stone and, whatever propagandists
may cry from the house tops, they know full well that
arbitration judges’ hearts are not of stone. Concessions
once made are with difficulty reviewed, even when
anomalies arise. Unpopular awards have been with-
drawn more tlian once “for the sake of industrial peace”,
under thread or actual pressure of strikes.®

The Arbitration Courts have been led on, pushed on, and
drawn into an increasingly elaborate rule over industry
very widely defined. Men may be expected to discover
and brood over anomalies when benevolent justice may
thus be moved to essay their correction. But industry and
commerce are very complicated, and one may in recent
years mark a weariness in the economic Titans of the
Court. Surely, they plead, margins for skill are fit matters
for settlement by masters and men according to changing

^ H. B. Higgins, A New Province for Law and Order, p. 14, and 5 C.A.R.
p. 48. The Shearers’ awards have greatly raised the standards of accommoda-
tion at the wool-sheds and “men’s huts” on the stations.

^ See G. Anderson, Fixation of Wages, pp. 322-7, 359. In 1914 Mr Justice
Higgins was led to remark in a Waterside Workers’ Case: “The grounds on
which special rates are claimed seem to be as numerous and varied as the

well-known excuses for drinking beer The union now claims a list of

some 30 special cargoes and in this are included case-oil, log-timber, pig-
iron and even ballast”.

* See G. Anderson, op. cit. pp. 450-64, and cf. pp. 476-80. On p. 457 the
learned author writes: “The position in regard to the adoption of an ex-
tended system of payment by results in Australia is worse today than it
was before Judge Beeby’s award, for there has been a trial of strength
between the unions and the Court, and the unions have won”. Cf. Higgins,
J., on p. 472.

EXTENSION OF WAGE-FIXING 381

Qeeds, and might not some mechanics be paid for what
they do? The unions frown on all this.

Awards not only became more inclusive, but as Mr Justice
Higgins warmed to his life-work they took on a scientific
method of remaining the same. A wage which was in-
tended to cover a labourer’s household needs could not do
so if it remained unchanged while prices rose. Until 1912
no exact measurement of the rise in prices was ready to
the Court’s hand, but in that year the Commonwealth
Statistician, Mr (afterwards Sir) G. H. Knibbs, put forth
“certain curious and interesting figures, the result of much
valuable research and compilation”.^ These were index-
numbers designed to measure the purchasing power of
money over a composite unit of commodities, derived
from the aggregate expenditure of Australians on certain
household necessaries. From 1913 the Federal Court has
made use of the index-numbers in finding, by rule of
three, the “Harvester wage equivalent”, i.e. the sum of
money capable of purchasing at current prices what 42^.
purchased in 1907.^

Thus through all the vicissitudes of war and post-war
prices, those who drew the basic wage were secure of their
real wages, of the normal needs of the average employee
regarded as a human being, so far as the Harvester judg-
ment covered those needs. It may be hard to regard that
average as divine, but it has certainly been placed, so far
as laws can do it, upon a pedestal of privilege. When
prices were rising rapidly after the war, the third President
added 3^*. a week to the “Harvester equivalent” in order,
as he said, “to secure at least to the workers the living

^ The description is Mr Justice Higgins’ first reference to them. See
Labour Report of the Bureau of Statistics, no. i (1912), “Prices, Price Indexes
and Cost of Living in Australia” as to the “weighting” of the standard
articles of consumption included. In G. Anderson, op. cit. p. 229, may be
found an account of the precautions to ensure their accuracy, by G. H.
Wickens.

^ After April 1923 the Court made a regular practice of inserting in
awards a clause providing for quarterly adjustments in accordance with
the “cost-of-living index-numbers”.

382 THE ORIGINS AND

wage adopted by the Court, whatever increase in the cost
of living there may be in any quarter”. This shock-
absorber, known as “Powers’ Three Shillings”, has been
retained in almost all subsequent awards, both when prices
were falling and when they were rising.

Yet the wage-earners have been beset by doubts whether
the “Harvester equivalent” really did provide for the
normal needs of the average employee. When during the
war clothing prices were rising more rapidly than those
of foodstuffs and rents, the complaint arose that the
aggregate expenditure on which the Commonwealth
Statistician based his index-numbers did not include
clothing. Under war conditions the effect was that Knibbs’
index-numbers understated the change in the purchasing
power of money. Their use assumed that the prices of
items omitted were varying pari passu with those of the
items inducted. By the time the ingenious officials in the
Bureau of Statistics had provided index-numbers based
on total household expenditure, including clothing and
miscellaneous items, the relative levels had altered. The
inclusion of clothing was then found to result in index-
numbers substantially lower than those calculated on the
original basis.^ Prices of clothing in Sydney, according to
the Bureau, increased only 24 per cent, between 1914
and 1927. Those of food, groceries and housing had gone
up by 53 per cent. Under these circumstances the doubts
of union advocates as to the adequacy of Sir George Knibbs’
original indices were waived. Their clients had been at
some disadvantage while clothing prices ruled higher, but
since 1921 they had made greater gains by the Court’s
continued use of the index-numbers based on food,
groceries and housing only. And these, tifter all, are the
normal needs of the average employee.

Critics delving for a richer content in the doctrine of
the sacrosanct wage next turned their attention to Mr

^ Commonwealth Tear Book, no. ao (1927), ch. xm, especially pp. 520-1.
But cf. J. L. K. Gifford, Economic Statistics for Arbitration Courts, pp. 24 et seq.

EXTENSION OF WAGE-FIXING 383

Justice Higgins’ original finding. Did it in very truth
cover the needs of a family of five persons? “Treating
marriage as the usual fate of adult men”, wrote the
learned President in 1915, “a wage which does not allow
of the matrimonial condition and the maintenance of
about five persons in a home would not be treated as a
living wage”. It was not hard to show, however, that the
Harvester judgment of 1907 had been based on very meagre
evidence furnished by nine housewives and a few tradesmen.
It had embodied as much the wages policy of the best
employers as “the normal needs” of the average working-
class family. To allay these new doubts, Mr W. M. Hughes,
protesting that it had been settled “long ago” that such
a basic wage should be paid as would enable a man to
marry and rear a family under decent, wholesome con-
ditions, appointed in December 1919 a Royal Commission
on the Basic Wage. It consisted of representatives of
employers and employees and was asked to determine the
“ordinary expenditure of a household of five”, its cost,
and how the basic wage should be automatically adjusted
to changes in that cost.

The Commission took much e\ddence. It made out
“indicator lists” of food adequate to the most scientific
dietetic scale, of clothing good in wearing quality and of
sound workmanship. It decided that a five-roomed house,
in sound tenantable condition, not cramped as to allot-
ment, in decent surroundings and provided with bath,
copper and tubs, set in, was the “fair thing” for a man
on the basic wage. Then it totted up the prices and found
that for such requirements the basic wage in Sydney,
November 1920, ought to be £5. 1 js., and in other capitals
similar amounts ranging down to £^. 6s. ^d. in Brisbane.
The “Harvester equivalent” on which Federal and State
minima were directly and indirectly based was then £4.. ly.
in Sydney, Melbourne and Hobart, £4. 9^. 6d. in Adelaide
and £4. oj'. 6d. in Brisbane and Perth. The Chairman
of the Commission himself urged that the adoption of

384 THE ORIGINS AND

its findings would ruin any industries manufacturing for
export, and by raising the costs of Australia’s primary
industries would set up a formidable drawback to their
development, perhaps to their continuance. He regarded
the findings as a reductio ad absurdum of the family wage,
based on the needs of a man, wife and three dependent
children. The payment of such wages to all adult male
Vorkers would provide for 2,100,000 non-existent children
and nearly half a million non-existent wives. He made the
announcement of the Commission’s findings an opening
for propaganda in favour of wages based on the needs of
man and wife only, and of a plan of family endowment,
financed by a levy on industry.^

Out of a furore of discussion there became perceptible the
doubts of consumers about the whole dogma of sacrosanct
minimaj and all who buy Australian products at home
or abroad We consumers. Was there not need of evidence
as to the effects of such fixed wage-standards on demands
for goods and therefore on demands for labour? Could
increased wages be passed on indefinitely? What of the
industries which sold their goods at the prices ruling in
competitive markets? Should not evidence be gathered of
the ability of industries to pay wages? From Queensland,
the hotbed of Australian political ideas, came a suggestion
in 1925 that wages should vary with the productivity of
industry, and that an index of the general capacity of
industry to pay might be compounded in each September
from changes in income per head, past production per
head and estimated future production per head.^ Un-
luckily the President responsible for the suggestion died
suddenly before the Commission’s report had been con-

^ For Australian developments along these lines see Report of Royal Com-
mission on Child Endowment or Family Allowances, 1929, especially pp. 35 etseq.
No industrial court prescribed the basic wage as defined by the Piddington
Commission, but cf. J. L. K. Gifford, op, cit. p. 44.

^ Report of Economic Commission on the Queensland Basic Wage, 1 925, pp. 66-70.
A criticism of the proposed index as a guide to capacity to pay wages is
ably set forth by J. L. K. Gifford, op, cit, pp. 46 et seq.

EXTENSION OF WAGE-FIXING 385

sidered by the Queensland Court. Changes calculated by
rule of thumb have been made in the wages awarded to
workers in industries below and above average prosperity;
but no statistical index of capacity to pay has yet been
adopted.

Even this rule of thumb recognition, however, was a
breach in the rampart of sacrosanctity. In 1909, Mr Justice
Higgins ruled that the Federal Court could not prescribe
a lower rate in order to keep an unprofitable mine going.
“If shareholders are willing to stake their own money
on a speculation, they should not stake part of the em-
ployee’s proper wage also. ” The propriety of a wage the
legal award of which would abolish their jobs was not
plain to the copper-minen. at Wallaroo and Moonta in
South Australia in 1921. They entered into an industrial
agreement to work, while the market for copper was low,
for less than the basic wage and the usual margins. This
agreement the Federal Court somewhat reluctantly recog-
nized. Fiatjustitia is a high doctrine. The danger involved
is that wage-fixing tribunals may raise their conception of
justice more rapidly than the price which can be allotted
from the joint product of the industry to the contributors
of routine service. Prices, even of routine and skilled
manual service, are ultimately encouragements or dis-
couragements to persistence in that service. If sacrosanctity
and increase of wages go hand in hand, more may be
attracted into the callings so blessed than can be found
regular employment in them. Fluctuating wages have a
social function to perform in minimizing unemployment
and sending labour to Sydney or the bush.^

‘ Cf. F. C. Benhani, Prosperity of Australia, pp. 209-10, and A. C. Pigou,
Principles and Methods of Industrial Peace (1905), passim.

s H

CHAPTER XXII

o 0^0 o

Strength and Protection

The three decades of the Commonwealth have
witnessed a remarkable advance by the Australian
pastoral and farming industries in the teeth of
natural and imposed handicaps. In 1901 primary products
from the mines, stations, farms and forests made up 93-8
per cent, of exports worth ^{^49, 696, 000. In the decade
ending June 1927, though the mines’ quota had fallen
away, p^ture and agriculture had grown so strongly that
the percentage of primary products among Australian
visible exports had risen to 95*5 1, in a total value averaging
;^i 25,622,000 per annum. Manufactures, which in 1901
contributed 6 per cent, of the exports, provided barely
4I per cent, in the decade 191 7-1927. A full third of
Australia’s recorded production is exported — a proportion
exceeded by few countries^ — and the part of the primary
industries in buying Australia’s share in the products of
the world has continued to increase.

The century dawned on a land seared by the worst and
widest drought the white man has seen. In New South
Wales, after six years of abundant rainfall from 1889
1894, eight successive years of subnormal rainfall cul-
minated in 1902 with a Sahara year. The mean rainfall
for the whole state fell below 11*91 inches. That at
Balranald for the first eleven months was 3*65 inches, at
Booligal 2*73, and at Bourke, from January i to October
31, 2*44 inches. The colony’s flocks, usually about half

^ Great Britain exports less than 30 per cent, of her production, the
United States of America less than 10 per cent.

STRENGTH AND PROTECTION 387

the Australian total, shrank from 57,000,000 in 1894 to
26,560,000 in 1902. That was “The Great Drought”.

Queensland, the region of summer rains, fared little
better. The onset was milder, 1895 1896 being years

of average rains in most districts though ending badly in
the West. Ninety-seven was a bad year and though 1898
was better, there followed four years of despair. When the
grasses were eaten and the saltbush was leafless, the best
of the sheep and cattle could only be kept alive by cutting
“the mulga”. At the sound of an axe the poor skeletons
would come running from every direction. “By the
middle of 1899 trains were running day and night, trans-
ferring nearly a million sheep from the great stations
beyond Winton to the Easlern Tablelands and the coast,
on whose coarse unsatisfying grasses no sheep had been
kept since the early sixties”.^ The men out West hung
on, watching clouds gather, drop a thin shower and
vanish in the night. Months passed; overdrafts mounted.
Though the experienced sold early or knocked on the
head all but their breeding ewes and stud stock, in such
a drought heavy purchases of fodder and costly bores to
deep artesian water were imperative to keep even the
remnant alive. “What a lot of money these pastoralists
must make to be able to afford such things!” said the
bush publican to the teamsters. Months dragged out into
years. In 1902 the mean rainfall for the state — coast and
tablelands thrown in — was 12-63 inches. Hard frosts cut
down the sugar cane even in the far north. Out West,
sheep and cattle, to save which mortgages had been piled
up for years, perished by the hundred thousand. The live
stock in Queensland had numbered over twenty-seven
million in 1894. In 1902 there were barely ten million.^

^ M. M. Bennett, Christisnn of Lammermoor, pp. 222-3.

* Production Statistics, Bulletin, no. 20, pp 209-11. In 1894 Queensland
depastured 19,587,000 sheep, 7,000,000 cattle and 444,000 horses. In 1902
there were 7,213,000 sheep, 2,540,000 cattle and 399,000 horses. For a
graph of the annual rainfalls see Rainfall Observations in Queensland, by
H. A. Hunt (1914), p. 12.

25-2

388 STRENGTH AND PROTECTION

Not even Victoria, slowly convalescent from her financial
fever, was spared. Of the eight years 1895 1902 only

one, 1900, touched the colony’s average rainfall and 1902
was the driest year on record. In ‘‘the cabbage garden”,
as envious old John Robertson called it, the tally of sheep
fell from 13,180,000 in 1894 to 10,841,000 in 1900 and

10.167.000 in 1904 — the only years in which Victoria felt
that she could afford to collect stock statistics. In South
Australia, nine years, 1894 to 1902 inclusive, each saw less
than ten inches for the province as a whole, though the
first was a good year in the agricultural belt east of
Spencer’s Gulf.^ Flocks on South Australian farms and
stations decreased from 7,152,000 in 1892 to 4,880,000 in
1902, cattle from 411,000 to 213,000 and horses from

186.000 to 164,000.

In Western Australia, old prospectors, who in those “dry
’nineties ’-^made forced marches across what is now the
Wheat Belt, find it hard to believe that the changed scene
will last. Where many that they knew died of thirst and
all walked in fear of it, there are now permanent water
supplies, and every winter fields of waving wheat. Long
rakes of trucks laden with grain pass, all summer through
and most of winter, along railways to the coast. Even
settlers who have lived through both the drought and the
wheat-boom shake their heads. They saw the native fauna
driven away by the drought between 1894 and 1902.^
Were those dry years a startling abnormality? The native
game have mostly returned to their old haunts, but will
the dry cycle come again too?

The Great Drought taught the women of “the back
blocks” to listen for that sweetest harmony “the orchestra
of rain, the crashing roar on the iron roof, the deeper roar
from the creek, the music of bull-frogs”. The hatchet-

^ For graphs and detailed statistics see H. A. Hunt, Rainfall Observations
in South Australia (1918), pp. 12 et seq.

* See an article “Seasons since i860”, by Bruce Leake, Western Maily
Perth, W.A. 5 July 1928, p. 42. See also the comments thereon by G. L.
Sutton and E. B. Gurlewis.

STRENGTH AND PROTECTION 389

faced menfolk who saw it through are not poetic folk, but
they respond surprisingly to Dorothea Mackellar’s

Gore of my heart, my country !

Her pitiless blue sky
When, sick at heart, around us
We see the cattle die —

But then the grey clouds gather
And we can bless again
The drumming of an army,

The steady soaking rain.

The decades that followed seemed by comparison a run
of exceptionally good seasons broken only by one bad
relapse, 1914. That impression is not, however, supported
by the official rainfall records. A comparison of the
“sheep map” of Australia^ with the rain maps from 1908
to 1928 reveals a four years’ drought from 1912 to 1915
against which large areas of dense sheep-holding had to
provide, and seven years of widespread deficiency of rain-
fall between 1918 and 1929. Drought after all is only a
question of degree in the back country. It is the harsh
master who has taught the pastoralists to keep Australia’s
fame for fine wool by a ceaseless culling of their flocks.
“If you want to grow the best merino wool in the world”,
wrote an old squatter in 1883, “you must stop in this dry
land which is carefully cultivated by Nature with rotation
of crops and allowed to lie fallow periodically — that means
a drought. If you had no droughts you would not have
the best wool in the world and our sheep would be con-
tinually in the hospital as they are in New Zealand, where
the merino sheep does no good. All life is a gamble and
I like to gamble with Nature, though I know that she
always has an ace up her sleeve and can ruin me when
she likes’’.^

Sheep and wool statistics have been eloquent of the
better selection and management of flocks. In this mature

^ C.T.B. no. 20, p. 627. Gf. ja^raph on p. 625.

* Barton, Reminiscences of an Australian Pioneer y p. 269,

390 STRENGTH AND PROTECTION

industry there has been little extension to new areas, save
in Western Australia. Nor did the number of sheep in
Australia again reach the 1891 total of 106 millions until
1928. But sub-division and better watering of paddocks
from artesian and sub-artesian wells/ top-dressing of
pastures with superphosphates, the increase of “cross-
breds ” in mixed farming areas and, above all, the culling
of the merino flocks have built up the yield of wool to
figures far above those of 1891. Then 106,421,000 sheep
gave a clip of 640,752,656 pounds, or about six pounds
per sheep. In 1902-3 the wool from 53,675,000 sheep
weighed 408,302,146 pounds or seven pounds nine ounces
per sheep, a result of selection for survival during the
drought. In 1913-14 the clip from 88,947,000 sheep was
771,308,222 pounds and the yield per sheep eight pounds
ten ounces, showing that the lessons of the drought had not
been forgotten. The improvement has been maintained.
In 1921 a total of 723,058,219 pounds was obtained from
86,119,000 sheep, again eight pounds ten ounces from
each, and for 1928-9 it is estimated that 950,000,000
pounds came from 106,100,000, a yield of almost nine
pounds per sheep.^ Drought, too, was the headmaster who
disciplined the farmers to listen to that quiet scientist,
Lowrie, and his advocacy of superphosphate. The farmers
on Yorke’s Peninsula (S.A.) were first to give heed, as
they had been first with mechanical improvements. Their
example gave permanence to wheat firming in its old
homes and extended its range inland. Two decades later
the improvement of the pasture-value of farmers’ stubbles
taught the pastoralists also the lesson of top-dressing. The

^ See Commonwealth Tear Book, no. 20 (1927), ch. xxiii.

^ The above figures are based on the numbers of sheep recorded in the
Commonwealth Bureau's Production Bulletin, no. 20, p. 21 1, and the estimates
of the quantity and value of the Australian production of wool set out in
the accompanying table, for which the author is indebted to the Common-
wealth Statistician, Mr G. H. Wickens. In fairness to him it must be used
as a compilation of doubtful accuracy. The deductions made from the two
tables in the text arc still more doubtful. All comparisons of wool yield
are vitiated by the changes in the practice of creek-washing, exporting in

STRENGTH AND PROTECTION

391

new methods have built up a wheat export industry which
under other auspices may well outgrow the pastoral in-
dustry in financial weight and international repute.

The Northern Mallee in Victoria, the Pinnaroo country
corresponding to it over the South Australian border, a
long strip in New South Wales to the west of “Coghlan’s
Line’’^ and the whole Western Australian Wheat Belt out-
side the Avon and Victoria Districts have been occupied
for wheat-growing since Farrer bred Federation and Lowrie
won credence about superphosphate. But the increase of
yield won by improved methods in the older farming
districts is at least as significant as these extensions inland.
A graph prepared by Dr A. £. V. Richardson shows the
relation between the district average yield of wheat and
the rain that fell on the growing crops in the Victorian
Wimmera from 1892 to 1928.^ The drought years 1902
and 1914 significantly divide the period into three phases.
In the seasons before 1902 each inch of rain which fell
in the growing season, April to October, gave the farmer
0*59 of a bushel, on the district average. Between 1902 and
1 91 1 an inch on the secd-bed meant nearly a bushel — 0-95
to be precise — and in the decade 1912 to 1921 it brought
forth almost a bushel and a half of better grain (1-43
bushels). Omitting the drought year 1914, when the rain
on the crop was less than four inches, the return per inch
of rain in the Wimmera district was i*66 bushels for the
other nine years in the 19 1 2-192 1 decade. The best
farmers and the students at Longerenong College win

the grease, scouring, etc. and by the varying periods between shearing, but
the general fact of increasing yield per sheep is plain in the period under
review.

^ See the final map in H. A. Hunt, Rainfall Observations in New South
Wales (1916), and compare this line with the “western line of profitable
wheat-growing on the map as frontispiece of the A’.iS'. W, Tear Book of 1927-8.

* Victorian Journal of Agriculture , 1925, p. 161. The whole article is an
excellent rt^sum6 of the progress in agricultural practice made by a district
now noted for its high standards. Dr Richardson was formerly Agricultural
Superintendent in Victoria, and thereafter Director of the Waite Agricul-
tural Research Institute of Adelaide, in his native South Australia. The
graph shown herewith has been continued down to 1928 by him.

392 STRENGTH AND PROTECTION

j 179 170

Grafih ^howin^ relaXionship. between. Average Whecd^Yield cuiji Sea^orial Kairifall
in the ?ftmrnenz,VLctoria , /Sd7-/928

Avercige Yield in bushels per acr^ thus SecisonalJicunfctll (A/trU - Ocioher) i/vus -

Estimated production of wool — Australia 1879 — 1928-9

Year

Number of sheep

Quantity in lb.

Value {£)

1879

53.896,345

321,893,655

12,782,264

1880

62,184,252

365,767,269

15.398,171

65,092,719

329,200,266

13,405,820

67,825,571

355,545.193

14,482,466

69,985,297

429,462,805

18,245,403

61,570,138

401,040,722

I7.I77.3OI

67,491,976

387,603,545

13.778,492

69,568,993

389,977,852

13,202,050

80,510,360

452,322,243

I 5,681,680

80,793,548

464,352,372

15.899.287

85,809,405

508,112,532

17.855.353

1890

97,881,221

468,281,600

16,293,789

106,421,068

640,752,656

20,648,816

103,272,068

644,840,166

*9,988,316

99,539,889

626,712,559

17,722,234

100,41 1,461

631,908,300

15,926,681

90,689,727

623,444,119

*6,553,5^

90,615,847

579,680,037

16,229,889

82,653,278

541,017,033

14,409,864

79,237,002

538,945,525

15,056,625

72,347,509

472,623,278

*8,945,0*3

I 900- I

70,602,995

391,401,848

*3,348,44*

1-2

72,040,2 1 1

539.394,377

16,348,000

2-3

53,675,210

408,302,146

13,672,000

3-4

56,932,705

410,388,376

14.959.000

4~5

65,822,918

470,401,503

18,223,000

5-^

74,540,916

516,721,130

21,155.000

6-7

83,687,655

570,733,785

24,1 I 1,000

7-8

87,650,263

682,360,564

30,512,000

8-9

88,352,469

647,415-575

24,737,000

9-10

94,453,703

740,249,776

28,830,000

1910-11

98,066,046

787,527,437

30,266,000

1 1-12

96,886,234

798,390.585

28,846,000

12-13

87,139,184

687,485,825

27,543,000

13-14

88,947,179

771,308,222

30,401,000

14-15

82,4^1,296

734,826,75 1

28,766,000

15-16

73,146,460

636,275,674

31,255,000

16-17

80,562,221

636,589-41 1

41,885,000

17-18

88,863,816

654-443,141

45,076,000

18-19

91,874,362

736,414,694

50,704,000

19-20

79,454,829

762,105,005

52,940,000

1920-21

81,795,727

625,197.486

37,636,000

2 1-22

86,1 19,068

723,058,219

39.577,000

22-23

82,700,514

726,683,278

55,608,000

23-24

84,0 1 1 ,048

662,598.085

66,45 1 .000

24-25

93,154-953

776,881,507

8 r ,430,000

25-26

103,563,218

833,738,907

61,633,000

26-27

104,267,101

924-410,553

69.430,000

27-28

99,357,738

888,129,780

75.634.000

28-29

*106,100,000

950,000,000

*69,572,000

* Estimated.

394

STRENGTH AND PROTECTION

yields far above the district average. The students ob-
tained 3*5 bushels of wheat per inch of seasonal rain
during the dry years 1917 to 1921. Private farms have

maintained an average of 3-6 bushels per inch. Thus the
farmers, like the pastoralists, have accepted the hard facts
of drought as a stimulus to skill and courage. Water con-
servation in the secd-bed supplies the wheat-plant, in the

STRENGTH AND PROTECTION 395

critical months of maximum transpiration, September and
October, with abundant sap to turn into grain. Fallowing
for fifteen months, late seeding and liberal dressings of
water-soluble phosphates give the short-strawed wheats of
Farrer and his school their chance to fill heavy ears with
plump white wheat, though the north wind rage off the
hot interior.

As a direct result the totals of wheat harvested in the
Commonwealth and the average yield per acre have
strongly advanced. The last year before Federation (1900)
saw a record harvest of 48,353,000 bushels from 5,666,000
acres, an average of 8-53 bushels. Before the first decade
of the century was over, average yields of more than eleven
bushels were usual, and two harvests (1903 and 1909)
had yielded over thirteen bushels per acre, a figure un-
known since the narrow fields of the mid-'seventies. As
prices were on the up-grade, such yields led to bigger
acreages under wheat. In 1913 the first nine million acre
crop of wheat gave the first hundred million bushel
harvest (103,344,000 bushels). After the year of war and
drought, 1914, a crop of 179 million bushels was grown
(1915) on 12,484,000 acres — an area broadened by the
re-seeded failures of 1914. Neither figure was excelled
for more than a decade thereafter, but the average yield
of 1915 (14*34 bushels) was surpassed in 1920 (i6-o8
bushels).

The rise of country land values and the eagerness of
successful business men to acquire country property may
suggest that the net incomes on stations and farms have
advanced at least pari passu with the expansion of wool
and wheat production. This is doubtful. In the land
hunger of successful Australians social ambition plays a
part, as well as economic calculation; for socially the
“hewers of wood and drawers of water” {vide any pro-
tectionist newspaper) are respected as the most typical
Australians and respect themselves in proportion as they
remain independent of state subsidies. And by reason of

396 STRENGTH AND PROTECTION

repeated increases in the customs tariff on imports and
of other government regulation of trade and prices, costs
have risen in the exporting industries to the detriment of
net incomes.^ A recent stocktaking of the effects of pro-
tection estimated the burden on Australian prices attri-
butable to such policies at 9 per cent, of the general price-
level.2 But there is no stability or permanently calculable
nature in this burden. Its inherent tendency is to grow
even when the external price-levels at which exported
goods sell are steadily falling. A statistical inquiry at a
specific date misses the vis a tergo of wage fixation and
similar benevolent policies. The continual raising of the
tariff and the spread of restrictive schemes designed to
secure “sheltered’’ prices in the Australian market even
for exportable goods (see Chapter xxiv) imply a general
belief that it does not matter whether the price-level of a
country is §, "10 or 20 per cent, out of line with those of
its customers.

Ever since the first federal customs tariff was im-
posed there has been an unceasing propaganda from the
secondary industries for more protection. Latterly the
primary industries, one by one, have joined in the chorus.
The cause is not mere greed; it is raised costs — raised by
policies intended to benefit specific groups through their
charges to others. Coal is the most edifying example of
a primary industry turned beggar. “Once an export
industry, the costs of production rose till it ceased to export
and became a sheltered industry — sheltered by the high
cost of transport. Finally costs have risen until this
shelter became insufficient and it is now (1929) beginning
to be exposed to the competition of imports.”® The in-

^ In Production Statistics Bulletin, no. 20, p. 183, may be found an inter-
esting comparison of the increases in prices of primary and manufactured
products. Without commenting on the statistical bases of the index-numbers
(p. 173), it may be noted that the greater relative rise for manufactured
goods, almost entirely consumed locally, suggests rising levels of cost in
exporting industries.

2 The Australian Tariff: An Economic Enquiry (1929), p, 68.

® Loc. Cit. p. 26.

STRENGTH AND PROTECTION 397

creased costs laid on Australian industries by such policies
are more deadly than those of drought. These have their
compensations when the drought ends, but since federation
there has been no breaking of the tariff".

A customs and excise tariff capable of raising consider-
able revenue was made necessary to the young Common-
wealth by the Braddon Clause in the Constitution (No. 87),
requiring the return to the state governments of three-
fourths of the net revenue from the duties. To give the
federal authorities the two millions they required, a tariff"
producing eight millions was indicated. Should it inci-
dentally give Australian manufacturers such advantages
as they had enjoyed under the Victorian, Queensland and
other tariffs? At the first federal elections a small majority
in the House of Representatives, the chamber to which
the Cabinet was responsible, was zealous to pursue this
aim of protection, but in the Senate the advocates of a
purely revenue tariff were about as numerous as the pro-
tectionists. The Prime Minister, Edmund Barton, though
inclined to restrain the ardour of C. C. Kingston, Minister
for Customs, had long been allied with the protection-
ists in New South Wales. A tariff was proposed which,
in defence of established industries, “must necessarily
operate protectively as well as for the production of
revenue”. The tariff which emerged in 1902 was a com-
promise in whose schedules protection reached a degree
most disappointing to the insatiable Syme and his hench-
men.

The Labour Party, though holding the balance between
Barton’s and Reid’s followers in the Representatives, came
mainly from New South Wales constituencies and had
“sunk the fiscal issue”, i.e. left its members free to vote
on tariff items untrammelled by decisions in caucus. Not
unmindful of the sting in George Reid’s election cry,
“Revenue without concession to private and class in-
terests”, many Labour men had helped to limit the duties
to a range of from 5 to 25 per cent., and to preserve a long

398 STRENGTH AND PROTECTION

free But Victorian protectionists were not slow to
size up this political situation. They evolved a ‘‘New
Protection” policy calculated to make the workers partners
on the ground floor in the benefits of protection. They
promised to “protect” the consumer too.

A parliamentary Royal Commission, appointed in 1904
to examine the workings of the new tariff, recommended
in ^1907 substantial increases in many duties, but added
“that where protective duties are substantially increased,
provision should be made to secure payment of reasonable
wages to persons engaged in the industries, benefited”.
Moreover, should the Minister certify that the retail
selling prices of protected goods had been unfairly in-
creased, the Governor-General on an address from both
Houses might by proclamation suspend the increased
duties on imports. ^ These novel proposals were accom-
panied by a^'^eview of the piecemeal and varying care
for labour afforded by state wages boards and industrial
courts in Victoria, New South Wales, Western and South
Australia and a note of the entire absence of such bodies
in Queensland and Tasmania. The Commissioners were
anxious to apply to all Australia, irrespective of state and
constitutional limitations, an idea which Deakin, as Barton’s
successor in the Prime Ministership, had embodied in the
Excise (Harvesters) Act during the preceding year.

This Act imposed on various Australian agricultural im-
plements excise duties amounting to half the customs duties,
but the duties were made variable with the behaviour of
the Australian manufacturer, which was evidently regarded
as a matter of free-will on his part. If he were found to be
“taking advantage” of the tariff and charging prices
above those declared by the Act to be “the fair thing”,
the Government took power to reduce the customs duties
by executive action. So the farmer would be “protected”.

^ For the tariff schedule see Commonwealth Statutes, no. 14 of 1902, vol. i,
p. 300.

® Progress Report, no. 50, pp. 4-5, 2nd session, 1907.

STRENGTH AND PROTECTION 399

The excise duties in turn might be remitted if Parliament
or an approved industrial tribunal certified that a given
manufacturer was paying fair and reasonable wages to his
employees. The leading manufacturer of these imple-
ments was Hugh Victor McKay. A farmer’s son, he had
as a stripling put together, from old stripper and winnower
parts eked out by cut-up “tins”, the first “stripper-
harvester”, and through many a struggle had built up,
first at Ballarat and afterwards at Braybrook Junction
near Melbourne, a thriving industry making his “Sun-
shine” harvesters and other labour-saving machines.
Mr Justice Higgins, in the famous Harvester judgment,
refused him a certificate that the wages and conditions
obtaining in the Sunshine works were “fair and reason-
able”. McKay thereupon refused to pay the excise duty.
Had not those wages maintained in employment through-
out the long Victorian depression a growing body of
workers at standards regarded by their fellows with envy?
He was sued by the Commonwealth before the High
Court. That Court, however, by a majority judgment of
three justices to two, held the Excise Act to be invalid.
The Constitution had granted power to the Federal Parlia-
ment to levy excises in order to obtain revenue. This was
an Act seeking to regulate labour conditions and inci-
dentally discriminating between states and parts of states.
The New Protection, with its complicated rewards and
penalties by which protected employers were to be led
and pushed into treating well both wage-earners and
farmers, seemed to have burst like a bubble. Yet the idea
had turned the political mill for the nonce and had en-
listed the Labour Party to work for high and higher
tariffs.

As shown in the preceding chapter, the Harvester judg-
ment at once became the basis of an active regulation of
wages and conditions by both state and federal tribunals.
Labour, having found where its interests lay, acquiesced
in extensions of protection by tariff revisions in 1908-11,

400 STRENGTH AND PROTECTION

1914, 1921 and 1926. The tariff of 1908-11 imposed rates
nearly double those of 1902 and cut down the free list.
At Deakin’s insistence a 5 per cent, preference to
British goods was allowed in items affecting a large
proportion of Australian imports from Britain. This
gesture of restraint in raising the impediments to British
trade with Australian customers was made 10 per cent,
wjien in 1914, 1920, and 1925 the tariff was put higher
still.^

The New Protection was but the first of a series of out-
works of “economic statesmanship’’. Its importance, at
first, lay mainly in the eager drive of self-interest with
which it inspired the Labour Party’s adherents, a drive
which in 1 9 1 0 placed the party in power over the Common-
wealth. The leading brain of the second Fisher Govern-
ment— first Labour Cabinet to enjoy the support of a safe
majority— Wfts William Morris Hughes, formerly a free-
tKxde Labourite. As the new protection policy worked
itself out in the wages tribunals, his eager brain saw in the
exceptional prosperity of the decade 1910 to 1921 oppor-
tunities to put in practice several ambitious policies
matured by Labour in the days and school of Deakin.
In addition to an important share in passing the tariff
schedules of 1914 and 1920, Mr Hughes brought into
operation an exclusion from the Australian coastal trade
of all vessels, whether British or foreign, not observing
Australian conditions and wages-awards for seamen. Simul-
taneously he purchased and expanded a government line
of ocean-going steamers. In these further steps towards a
closed economic system the aspect of imperialism, though
still proclaimed, was difficult to maintain.

Mr Hughes had first made his political mark as organiser
of the waterside workers and seamen in the old Lang
division of Sydney. It was but to be expected that he
should press on the federal legislature a plan for securing

^ For the later schedules see Commonwealth Statutes, no. 25 of 1921, vol. xix,
p. 76, and no. 26 of 1926, vol. xxiv, p. 78.

STRENGTH AND PROTECTION

401

by law “fair and reasonable’’ wages and conditions for
workers on the Australian coastal steamers. It was not
his own plan. A Navigation Bill had been drafted in 1902
by a Customs official. Dr H. N. P. Wollaston, following the
lines of a measure designed to control Sir James Mills and
his Union Steamship Company of New Zealand. It had
a stormy legislative history. Kingston having resigned
over the Conciliation and Arbitration Bill, the Navigation
Bill was referred to a Royal Commission and the mantle fell
on W. M. Hughes as its chairman.

The Commission presented a majority report in 1906
adorned with much rhetoric about “a numerous and well-
manned mercantile marine — the only safeguard for our
Empire — sufficient to transport our products in time of
peace and to assist in guarding our shores in time of war. . . .
We shall best serve imperial interests”, wrote the majority,
waving the flag of Empire against the critics of restriction,
“by setting an example which the other members of th::
Empire may be inspired to follow, in providing for the
defence of the Commonwealth by employing our own
citizens on our own ships”. But that policy, tried and
let slip again and again by Britain between 1381 and 1849^,
signally failed to inspire “the other members of the
Empire” when presented at an Imperial Conference on
Merchant Shipping Laws in 1907. It continued as a
piece on the Australian legislative chess-board during
five sessions 1907, 1908, 1910, 1911 and 1912 and was at
last enacted at the bidding of the Second Fisher Ministry
in 1912.

The debates had discovered no way round the contention
of the Minority Commissioners of 1 904, that the proposed
coastal clauses, excluding from the Australian coastal trade
overseas vessels which did not observe Australian wages,
hours, rules of manning and accommodation, would re-
strict transport facilities and enhance the monopoly powers

^ See G. F. Bastable, Commerce of Nations (ninth edition), pp. 34, 53,
165.

s H

402

STRENGTH AND PROTECTION

of the associated inter-state shipping companies.^ It was
an evasion to say that Australian trade was growing so
fast that whatever was done would still leave a trade
profitable enough to attract “a sufficient fleet of ships to
meet all the reasonable requirements of Australian pro-
ducers”. Tramp steamers, the adjusting factor in the
supply of ocean transport, go where they are most likely
tp fill empty space on every “leg” of their voyage.^ Any
limitation of that likelihood forces the charging, on balance,
of a higher average level of freights.

The Bill, even when passed, was reserved for the Royal
assent as one affecting Imperial interests. War had broken
out before that assent had been received. The proclama-
tion of the “coastal clauses”, a step inevitably delayed by
the necessity of giving ship-owners notice of the need of
structural alterations in their vessels, was postponed until
after the w?ft: at the request of the British Government.

War-time brought, after a pause in 1914, an increased
sense of secure prosperity. Isolation looked like security,
and a moderate inflation like sound, though easy, monetary
conditions. A prospering countryside after the bumper
seasons of 1915 and 1916, and customers for manufactures
in New Zealand, Java, South Africa and the Islands who
were very ready to pay prices which had risen less than

1 When a witness who knew the ways of the Associated Steamship
Companies from within (H. McLennan, Melbourne Manager for J. and
A. Brown, Newcastle Colliery Proprietors, and formerly a director in the
shipping firm of Howard Smith, Ltd.) explained to the Navigation Bill
Commission the workings of the deferred rebate system and the monopoly
it had created in the coastal cargo trade {Comm. P.P. session 1906, vol. iii,
p. 951, and cf. p. 949, questions 24300 and 24322), the Majority Com-
missioners thought the rebate system “open to grave abuse” and recom-
mended the “introduction of legislation making it illegal”. But a system
that built up a “fighting fund” of accrued bonuses amounting to £60,000
in the shipowners’ custody, automatically available for use against com-
petitors as their intrusion became serious, was not to be abolished by a wave
of the law-givers* wand, nor indeed otherwise, until its work was done.

* “The element of greatest influence in the competition for ocean shipping
between ports is the so-called ‘load-factor*, i.e. the possibility of a ship
bringing cargo to a port and at the same time getting another cargo out.”
Sir George Buchanan, Transport in Australia, vol. i, p. 16; Comm. P.P.
1926-8, vol. v, p. 1 06.

STRENGTH AND PROTECTION 403

those of Europe and America, led men to forget the cost of
raising ‘‘fair and reasonable’’ conditions to whatever level
the heart of man desired. Increased customs duties went
almost unnoticed. Under ever-widening “awards” manu-
facturers were led to share the good times with the workers
in shorter hours and better wages. The times emboldened
Mr Hughes, Prime Minister after October 1915, to extend
the Australian system to the high seas by means more
direct than even the New Protection and the much-
postponed Navigation Act. Again he worked upon a plan
long conned and argued. As early as 1906 a Federal
Royal Commission on Ocean Shipping had reported that
“as a matter of principle the sea carriage of goods should
be as much in the hands of the state as land carriage
now is”.^

In those days of Socialist enthusiasm, little restrained
by the responsibihties of office, it was almost inevitable
that a Commission drawn largely from the Labour Party
should turn from arguments about the mail subsidy and
poundage rates to “the larger question of establishing a
line of mail steamers under the direct control of the Com-
monwealth Government”.^ On such a government line
both freights and wages would register the Socialist govern-
ment’s bidding. On four grounds the Commissioners had
advocated the building and operation of a National Fleet
of mail-steamers. It could be cheaply financed by an
internal loan of about three millions on which the Govern-
ment need pay no more than 3 per cent. An up-to-
date fleet of eight vessels would show the way to private
enterprize just as the government railways did in Australia.
Though it could be just as economically operated, except
as regards wages, as any private company’s ships, the
Government line would not require to show any profit.
And as to wages, “the payment of deep sea wages on the

^ Comm, P.P. session 1905, vol. in, p. 1050, Report of Royal Commission on
Ocean Shipping Service.

* Loc. cit. pp. 1 04 1 -2.

26-2

404 STRENGTH AND PROTECTION

Australian scale would undoubtedly enable the national
ships to obtain the pick of all ranks of seamen engaged in
the oversea trade”.

Early in 1916, though Australian manufacturers were
enjoying more spacious markets by reason of Britain’s
preoccupation with war, it became evident that for want
of shipping the bumper wheat harvest of 1915 would rot
(Jn Australian wharves and sidings. In that event the
farming population, customers essential to the Australian
home-market, would be ruined. Mr Hughes, urging in
England the pooling for the common cause of all resources
of shipping foodstuffs and men, and fearful that the far-
distant Australian contribution to the pool would be
neglected, suddenly felt impelled to buy a fleet of fifteen
tramp steamers. They were not new, nor were they the
right size f^ the long voyage. It would have taken them
seven or eight years to shift the accumulated wheat. But
they proved useful pawns in the negotiations with Britain
for its sale and transport. They could be used where they
were suitable, and so set other tonnage free to shift the
wheat. This gesture of impatience or independence did its
work. The British Government bought and transported
the wheat, and Mr Hughes’ Strath line, re-christened
“Australs”, earned big freights carrying petrol from
American ports to Australia and on other relatively safe
routes. Before the war was over they had more than paid
for themselves. They cost originally £2,052,000 and by
1921, on Mr Hughes’ computation, they had made a
profit of £2,993,245. Perhaps, as a capable critic sug-
gested,^ the Prime Minister had not allowed for deprecia-
tion during those years of hard driving, but in company
with nearly a score of interned German vessels the Com-
monwealth Line had made paper profits of over seven
millions.

^ S. M. Bruce, Comm. P. Debates y 29 November 1921, voL xcviii, pp. 13,
339. But the critic added, “it is impossible either for an accountant or
an ordinary intelligent layman to get at the position from the statements
as they have appeared in the Budget papers from year to year**.

STRENGTH AND PROTECTION

405

When the war ended, Mr Hughes was no longer at the
head of the Australian Labour Party, but he had not
forgotten his Kaiser-like enthusiasm for a fleet on the
ocean flying the Australian flag and observing the Aus-
tralian seamen’s log of wages and conditions. He was not
allowed to forget it. As hostilities ceased the Seamen’s
Union had become restive. Surely the coastal clauses of
the Navigation Act might now at last be proclaimed. In
May of 1919 the seamen struck, putting this forward as
one of their demands.^ Though unsuccessful, their action
brought the Navigation Act once more to the forefront.
Mr Hughes was then absent at the Peace Conference, but
before he returned to Australia he had effected a second
shipping coup by ordering, without the consent of Parlia-
ment, a fleet of five large passenger and cargo vessels.
Contracts for the construction of these were placed in
Britain while the Australian seamen were still defying
Arbitration Court, fellow Trade Unions and public opinion
alike. These five steamers were to become famous as the
‘‘Bay liners”. Before their arrival in 1922, the way for
their entry into the trade from Brisbane to England via
all Australian capitals and the Suez Canal had been duly
smoothed by the proclamation, in July 1921, of the coastal
clauses of the Navigation Act, excluding their competitors
from participation in the coastal trade.

Alas ! The full tide of war and post-war activity on the
seas was now ebbing fast. When in November of that year
the House of Representatives debated the position of the
Commonwealth steamers, it was plain that the “Austral”
and ex-enemy vessels were with difficulty showing any
profits. Old age, rough usage and a declining freight-
market were telling heavily. Mr S. M. Bruce, from the
detachment of the back benches, pointed to a net capital
cost of the steel vessels bought, seized, built and building,
amounting to ^(^3,648,000. He arrived at it by subtracting

^ In The Round Table ^ December 1919, p. 166, may be found a useful
summary of their other demands.

4o6 strength and PROTECTION

from cost and interest the net profits made. He concluded
that “the Commonwealth can either get out of the venture
at this moment and look back on a record which shows
no loss and probably a slight gain, or hand the vessels
over to the Commonwealth Line (under non-political
management) on a capitalised basis which would give
them a chance to compete with any likely competitor”.
He advised sale, but the majority of the House still feared
the power of the Shipping Conference. The revival of
Scandinavian, German and Italian shipping, the expan-
sion of the American and Japanese mercantile marines did
not in their opinion offer adequate guarantees against the
power of the ring to raise freights.

Selling off the older vessels, cancelling orders for new
ones, the Commonwealth Line continued under non-
political management for another seven years. But losses
mounted hp. These did not arise from cutting freights
against the Conference vessels to the advantage of
Australian shippers. From the first the Commonwealth
vessels had charged Conference rates, and the freight index
numbers of The Economist show no sign of a more rapid
fall of Australian freight rates during the period of their
ownership by the Commonwealth Government. In mid-
1928 the remnant— the five Bay liners and a handful of
cargo-carriers — were sold to Lord Kylsant for ^1,900,000
and the Commonwealth retained only an accumulated net
loss of some six millions.

The unions who had been partners in the splendid
adventure did not altogether lose the Australian rates of
pay and conditions aboard ship. These had been hammered
out in the first instance by negotiation with the Common-
wealth Steamship Owners’ Association, and thereafter
registered with and revised by the Commonwealth Arbi-
tration Court.^ The generosity of the wages and conditions

* The first Commonwealth Arbitration Award defining wages, hours and
conditions for the Federated Seamen commenced to operate in December
1911 (see 5 C.A.R. p. 147). The first Waterside Workers’ Award of that
Court was given on 1 May 1914 (see 8 C.AJi. p. 52).

STRENGTH AND PROTECTION

407

secured on Australian coastal shipping had not brought
about that expansion of the Australian mercantile marine
which the authors of the “White Ocean Policy” seemed
to expect. In addition to the cramp of legal regulation,
economic forces of impersonal origin were checking the
call for inter-state vessels around the coast. The Western
Australian trade in the ’nineties and the early years of this
century had been a busy colonization of an undeveloped
area. Men and families had to be carried over the Bight
by tens of thousands, with clothing, foodstuff, machinery —
all the impedimenta of a big campaign into the interior.
The movement and subsequent trade were in many ways
reminiscent of the longer-range gold-seekers’ migration
from Britain in the ’fifties. In the second decade after
federation, however, the Western state began a big export
of foodstuffs to Europe, and its requirements from the
Eastern states ceased to grow. Passenger traffic has ex-
panded very slowly since the East-West Transcontinental
Railway between Kalgoorlie and Port Augusta was opened
in October 1917. Similarly, passenger traffic on the eastern
coast has felt the competition of the new coastal railways
in New South Wales and Queensland. Airways already
offer a still speedier service between the state capitals.
Timber from the West to the East, butter from East to
West, iron ore from South Australia in exchange for coal
from Newcastle, raw sugar from Queensland mills to the
refineries at the capitals’ ports, the varied manufactures
out of Sydney and Melbourne factories — these things
freight inter-state vessels, but they are a fleet of smaller
tonnage than before the war. The vessels on the Australian
register had in 1928 a tonnage of 284,622, a figure almost
coinciding with that of 1908, viz. 284,641 tons. Yet the
companies have cargo space in excess of the coastal
demand for it at the high Australian freights.^ “In the

^ Messrs Anstey, Yates and McHugh, in an elaborate report favourable
to the Navigation Act {Comm. P.P. 1923, vol. ii, pp. 1071 et seq.)y claimed
that there had been no increase in Australian coastal rates after the pro-
clamation of the Navigation Act’s coastal clauses, ignoring the fact that

4o8 strength and PROTECTION

inter-state trade”, wrote a recent observer, “Australia is
provided with as fine a service of steamers as can be found
in the world and one capable of great development in the
future”.^ As elsewhere in the Australian economy, the
question presses whether the stable has not been improved
at the expense of the horses’ feed. While war and post-war
prosperity lasted, such out-buildings of protectionism as
government steamers and a lavish coastal service afforded
unique conditions and wages and passed for expressions
of our national pride. When drought and falling prices
came again, their cost became an appreciable mortgage
among many that endangered the national estate’s
recovery.

on most of the world’s routes the period 1921 to 1924 saw heavy decreases.
They admitted that coastal freights, under the Navigation Act and Arbitra-
tion Award, were 20 per cent, above pre-war rates. Gf. Comm. P.P. 1914- 17,
vol. VI, p. 1606.

^ Sir G. Buchanan, Transport in Australia, vol. i, p. 14.

CHAPTER XXIII

O— — «(^o O

How Tariff Protection Grows

o — -o

IN the politics of a protectionist country there is no
ease. Having given certain industries an advantage
in the home market, your protectionist is torn with
anxiety that they will take advantage of the consumer.
Hence his addiction to boards. Subconsciously aware that
he has run a risk of high prices and slack service, he calls
on a board of experts to guard against it. But his board,
soon or late, advises him that the task is too complex.
He gets rid of it, or reconstructs it, and the farce begins
again. But the manufacturer or other candidate for ad-
vantage ignores these boards and makes straight for
Parliament House. From the story of one such board
may be learnt the fate of all.

Section loi of the Commonwealth Constitution reveals
the fear of the authors of federation that, in the exercise
of its powers over trade and commerce, the Common-
wealth would need an organ of adaptation to unforeseen
changes, a board whose rulings might be more flexible
than the decisions and precedents of the law-courts.
‘‘There shall be an Inter-State Commission”, they enacted,
“with such powers of adjudication and administration as
the Parliament deems necessary for the execution and
maintenance within the Commonwealth of the provisions
of this constitution relating to trade and commerce and
of all laws made thereunder”. This came true. There was
such a commission for seven years, but it was born late
and died young. Parliament, like the Federal Conven-
tions, intended it to be both a court of record and a board
with wide powers of inquiry and action in defence of inter-

410 HOW TARIFF PROTECTION GROWS

state freedom of trade.^ The High Court ruled, however,
that the statutory limitation of the Commissioners’ tenure
of office to seven years incapacitated them from the
exercise of judicial powers under the Constitution. The
Commission became an impotent thing, analogous to a
Royal Commission or a Parliamentary Committee. It con-
tinued in existence until 1920, but the government of the
dey ignored every suggestion it made for the amendment
of its defective legal basis. At the expiry of the first Com-
missioners’ term no fresh appointments were made and
the Commission lapsed.

The Federal Conventions may have been wise or unwise
in seeking to entrust to a standing tribunal of wide powers
the defence of the general interest in free enterprize. But
in its absence that general interest has gone unregarded.
The voice of the special pleader is never stilled. New
Protection, developing through wages fixation, tariff
schedules, Navigation Act restrictions and subsidies on
export, has wrapped Australian industry in a net of legal
rules. The Australian business man is tempted to become
a suave concessionaire, exploiting his small corner while
yet the system admits it, but explaining that he would
gladly treat his clients better if the newest board would
but give him a little larger scope and check the unpatriotic
greed of others.

During its brief term of existence the Inter-State Com-
mission presented a series of reports on the Tariff, tracing
some of the more obvious repercussions of “scientific
protection”. The natural protection of local manufactures
by distance from Europe had been diminished, even off-
set, by high inter-state shipping freights.^ While these

^ See Comm. P.P. sessions 1914-17, vol. ii, pp. 1195 et seq.j Second Annual
Report of the Inter-State Commission, reviewing the effect of the High Court’s
judgment, in the Wheat Case, upon the functions of the Commission.

* See, for instances, their reports on Boots and Shoes, Enamelled Baths,
and Iron and Steel, Comm. P.P. sessions 1914-17, vol. vi, passim. “Freights
from Sydney and Newcastle are higher and were so even before the war,
than from Middlesbrough, the principal exporting port, to Australian ports
direct.”

HOW TARIFF PROTECTION GROWS 411

remained the Commission hesitated to recommend pro-
tective duties high enough to ^'compensate” them in
Western Australia and other outlying parts. But were not
the tolls of the inter-state shipping combine, that impeded
local manufacturers in the outlying parts of Australia,
paralleled elsewhere and everywhere by the restriction of
industry through high costs? A tree whose outer twigs
wither has weakened also in trunk and roots. Charges
passed on are borne by someone.

The Commission’s terms of reference in these tariff
inquiries drew attention to the need of 'Tessening the cost
of the ordinary necessaries of life”. But the Commissioners
found that none of the 666 applicants for tariff assistance,
whose wares ranged from motor cars to insecticides, from
corsets to canary seed, had any concern with this. “The
cost of living”, they reflected,^ “is everybody’s business,
but not the special affair of each citizen in such a sense
that he could give authoritative information on the state
of prices and ofmanufacturing trades in relation thereto. . . .
Any increase in the cost of living resulting from Tariff
taxation produces its effect only by a total of separate im-
posts on many separate items.” Yet all the applicants
stood in separate and urgent need of protection. Some
found it irksome to be precise as to evidence of that need.
The Commission had issued a printed form on which
applicants for assistance were asked the present state of
their business and the progress made during the three
years ^ previous to the date of application. The result was
disappointing, not to say disturbing. They all with one
accord began to make excuse. “The filling in of the forms
involved too much trouble. Details were not available of
the matters specified in the forms. Manufacturers were
averse to disclosing the financial results of their opera-
tions.” When the Commissioners, armed with formidable

^ Comm. P.P. session 1914-17, vol. vi, p. 3, First Annual Report of the Inter-
State Commission.

^ Comm. P.P. session 1914-17, vol. vi, pp. 10 et seq. The form itself may
be found in vol. ii, pp. 1 168-73,

412 HOW TARIFF PROTECTION GROWS

powers and knowledge/ persisted by oral examination,
‘‘applications in many instances were considerably modi-
fied as the result of the private investigations, and so, too,
was the evidence given in public”. One applicant named
Bernstein, who had applied for an increase of 20 per
cent, on duties already at 40 and 30 per cent., was “un-
able to give any information as to manufacturing costs.
He said ‘I am not aware of our profits for the past three
years. I do not know anything about finance’”.^ The
Commission thought it unreasonable “that taxes on the
community should be increased on the plea of unprofitable-
ness of manufacture unless this plea can be made good
by something more than assertion”.

Other witnesses, disliking this nice calculation of less
and more, refrained from suggesting the levy of taxes on
the community. They would be content with a simple
prohibition ^f entry to the Commonwealth of goods likely
to compete with their own. If this boon were granted,
they would enter into bonds not to increase prices save
when wages or raw materials rose in cost; and even then
the increase should be under the Inter-State Commission’s
control. With the local market thus secured there would
be, they contended, a pro rata reduction of overhead
charges which would “tend to reduce prices!” The Com-
mission politely demurred. “The total exclusion of new
ideas and improvements to which the whole industrial
world is contributing could not possibly act otherwise than
to our substantial detriment”.®

^ The Chief Commissioner, Mr A. B. Pididington, K.C., had been offered
a place on the High Court Bench. Mr Nicholas Lockyer had been Controller-
General of Customs and Mr George Swinburne, M.L.A., of Victoria, wzis
a business man of wide experience in political and industrial administra-
tion.

* Comm, P.P, sessions 1 914-17, vol. vi, p. 134.

* The authors of the Australian Tariff: an Economic Inquiry (1929), p. 116,
have in effect thrown the mantle of their authority over such pleas for
monopoly. Having in mind (see p. 115) the iron and steel and the metal-
lurgical industries, they hold that “ the problem of safeguarding efficiency
now requires a different solution in industries capable of great economies
through concentration”. Industrial monopoly they regard as “a relatively

HOW TARIFF PROTECTION GROWS 413

Even under the Tariff of 1908-1 1 the Commission found
among manufacturers a widespread neglect of accurate
costing, and a lack of attention to what their rivals in
other countries were doing. Inspection of factories re-
vealed an “urgent necessity for a greater appreciation of
the value of industrial efficiency”. Waste of power, un-
suitable buildings, double handling of goods, waste of
by-products, want of appreciation of applied science had
enhanced the cost of manufacture and rendered necessary
“higher duties than would be the case if the operations
were accomplished by the most efficient modern methods ”.

The costs of production of Australian manufactures, so
far as revealed in official statistics, had increased by
£50)235,000 between 1908 and 1913, a time of rising
tariffs but also of “exceptional abundance in primary
production”. The general affluence had permitted the
value of manufactured output to rise by ^(^62,03 1,000.
“It thus appears”, commented the Commission, “that
the great increases in the burden of production have been
successfully passed on to the consumer, together with an
additional sum of £11,795,000”. But some allowance
from this total had to be made for increased overhead
charges and costs of distribution. Others beside the manu-
facturers had had their “cut”.

The Australian boot and shoe industry, pre-eminent
among the secondary industries, afforded a clear view
of the process of passing on. The Victorian boot manu-
facturers, with a perfunctory acquiescence from those
in New South Wales, asked the Inter-State Commission
for composite duties of 2s., is. 6d. and is. per pair of men’s,

new phenomenon virtually unknown to the classical economists”. They
think that, with “the automatic and simple safeguard of public knowledge
and public criticism. . .the protection given should be sufficient, not merely
to place local production on an equality with imports, but to exclude those
which could equally well be made in Australia. The best economic con-
ditions for a protected industry are established when it obtains the maximum
market for an organized output, and protection is likely to be most eco-
nomically applied when it is limited to such industries.” One is reminded
of Governor Hunter and the trading officers.

414 HOW TARIFF PROTECTION GROWS

women’s and children’s footwear, plus an ad valorem duty
of 25 and 30 per cent. These duties, they hoped, would
enable an ‘‘arrested industry” to win the 13*8 per cent,
of the market still served by importers. They hastened to
assure the Commissioners that there was no danger to
the consumer in increasing the duties. In the main lines
of boots already made in Australia “internal competition
is sufficiently keen in this trade to keep manufacturers’
prices at the lowest rates consistent with safety”.^ The
Commission, avid for the facts, confronted the President
of the Victorian Boot Manufacturers’ Association with a
statistical study of increases in costs and values of output.
Only one inference, that dignitary admitted, could be
drawn from it. Manufacturers were able to pass on to the
public their increased expenses, plus an advantage. Nor
was indication absent that the wage-earners wittingly
shared in 'gS!ns so accruing. An “Inter-State Confer-
ence”— not to be confused with the shipping combine —
represented the Boot Manufacturers’ Associations of New
South Wales and Victoria and the Australian Boot
Trade Employees’ Federation in all states save Western
Australia. It was active in urging the need of more
protection.

The Inter-State Commission ventured to remind Parlia-
ment that every burden on trade is paid for by someone.
“When the finished article of one industry is the necessary
raw material of another the Tariff encouragement to both
industries may fail to stimulate development in either
case.” Growing bolder in thought, they predicted that
“it may at times be found a distinct economic advantage
to withdraw Tariff encouragement from certain sub-
ordinate industries when the effect of such encourage-
ment is proved to be a hindrance rather than an aid to
the total of industrial development”.

What, then, is a subordinate industry? Before industrial
tribunals the term “industry” has been given a wide

^ Comm. P.P, sessions 1914-17, vol. vi, pp. 264 etseq.

HOW TARIFF PROTECTION GROWS 415

connotation.^ It cannot now be narrowed to exclude the
callings whose success or failure drives fast or slow the
wheels of the Australian economy. So long as pasture,
mining and agriculture provide almost the whole (95-5
per cent.) of Australian visible exports, there can be no
question that the manufacturing industries are sub-
ordinate, in the sense that their prices must consort
with such costs in the primary industries as enable the
latter to make headway against their rivals. The sales
of the manufacturers are the costs of the primary pro-
ducers.

Too long have Australian leaders talked as though no
burdens could offset our natural advantages for growing
wool and wheat. “Fortunately”, sighed the Inter-State
Commission, “Austraha offers the possibility of unlimited
expansion in agricultural, mining and pastoral industries
for the products of which the world’s demand is practi-
cally unlimited.”^ Thirteen years later the Development
and Migration Commission, in another First Report, clung
with less confidence but more circumlocution to the same
hope. “If the industries affected in a complex and dis-
turbing manner are special in their nature and can com-
mand a place in the markets of the world, and can retain
that place in spite of the adverse conditions — in short, if
the world must have their products — they will survive.”®
A nation hoping to progress in numbers and well-being
requires a vigorous advance — ^not the mere survival of its
chief industries. The Inter-State Commission foresaw that
the market for numerous Australian manufactures would
be confined to the Commonwealth and could therefore
offer only a limited expansion of employment. Its warning
was underlined by the collapse after the war of the sortie
which Australian boot manufacturers made between 1916
and 1921 into the markets of New Zealand, South Africa

‘ Sec G. Anderson, Fixation of Wages in Australia, pp. 171 et passim.

® First Report of the Inter-State Commission (1914), loc. cit, pp. 12-13.

® First Report of D, and M, Commission, November 1927, p. 8,

4i6 how tariff PROTECTION GROWS

and the islands, and by the decline in the export of har-
vesters to the Argentine, a trade built up by H. V. McKay
in days of less protection.^

The Commission reasoned, in effect, that when in doubt
Australia should lead from her longest and strongest suit,
the industry that promised the wider success. Her search
for the long suit could hardly pass by wool or wheat,
yet, hard on the heels of reports expressing this general
advice the Inter-State Commission put forward a series of
recommendations in favour of increased tariff protection on
all manner of goods. It commended to Parliament most
of the pleas of manufacturers for duties ‘^commensurate
with their costs of manufacture and distribution’’. The
implied theory is that the citizens of a “protected ” country
must be denied the fruits of business capacity in all lands
but their own.

Where ’MU the historian find a bridge over the gulf
between the Commission’s critique of pure protection and
its practical advice to Parliament? Not in its recommenda-
tion of duties on corsets and stockings. These seemed
just and right because it was anomalous that such articles
should receive “diflFerent treatment from that extended
to ordinary apparel”. But if no item in a tariff be
“anomalous ”, no protected industry reaps a net advantage
from the tariff.

When everyone is subsidized
Then no-one’s any booty.^

A scientific tariff should be like the French criminal who,
after being “psycho-analysed”, found that his character
consisted entirely of defects.

The Commission may have known that Parliament
during the war was in a mood to welcome any plea for

^ The Toronto Globe announced, 8 October 1929, that the H. V. McKay
Proprietary Ltd. had completed arrangements for the manufacture of
Sunshine harvesters in Canada and would transfer its export business
thither.

* E. G. Dyason, after W. S. Gilbert.

HOW TARIFF PROTECTION GROWS 417

home industries. But, to the extent that such knowledge
influenced it, the High Court’s doubts of its independence
were upheld. Parliament showed its mind plainly enough
in an ingenious alteration of the duties on agricultural
implements. The manufacturers of these refused to deploy
for the Commissioners, on the first parade ground of the
New Protection, either claim or argument. On behalf of
the agricultural implement workers an Adelaide com-
mercial traveller told of their readiness to support any
application for prohibitive duties. He confessed that he
did not know the manufacturers’ costs,^ but felt sure that
duties of £12 per stripper-harvester fixed when such
machines were six feet wide ought to be raised now that
they were made nine feet \'ide. In the absence of both
application and evidence from the manufacturers, the
Commission made no recommendation. Such a resolute
stand did not, however, deter the legislature. It enacted
alternative duties of ^^13 or 35 per cent., general tariff,
and £10 or 22\ per cent., preferential tariff, that rate to
operate which returned the higher duty.^ These straws
showed the way the wind blew in Parliament.

Perhaps the bridge over the gulf of paradox may be
found amid the rival and elaborate recommendations of
the Chief Commissioner and his two colleagues concern-
ing iron and steel — “compared with which even gold may
be looked upon as of secondary importance”. The war-
time cult of self-sufficiency gripped them.

An economic history of Australian iron and steel has
yet to be written. An indication of the stages in the growth
of the industry must here suffice. Before the era of gold
diggings, men were testing the abundant supplies of iron

^ Comm, P.P. sessions 1914-17, vol. vii, p. 8: “We wrote to the chief
manufacturers asking them if they needed further protection, and if they
did so we would support them. They wrote 10 us then. I am unable to
give the names and full replies”.

® The ad valorem rates, in a period marked by increasing prices and larger
machines, were the effective ones. Concerning reapers and binders, imple-
ments not previously made in Australia nor dutiable, see Comm, P,P,
sessions 1914- 17, vol. vii, pp. 13 et seq.

4i8 how tariff PROTECTION GROWS

ore, limestone and coal scattered about New South Wales.^
A small blast furnace and two beam engines were working
at Nattai (now Mittagong) in 1848. Their Fitzroy Iron
Mining Company ran, however, a chequered and un-
profitable course. Like all other colonial callings except
wool-growing and sugar-refining, it was laid low by the
superior attractions of alluvial gold. “Australia could
produce gold with comparatively less labour than any
manufactured commodity, and with the gold it could
import its manufactures from countries where they were
produced with comparatively less labour than was gold.”*
As the exhaustion of the diggings modified this “cardinal
economic fact of the fifties”, a larger blast furnace was
set going again at Mittagong and made iron for the girders
used in 1864 for Vickery’s Buildings, in Pitt Street. The
Fitzroy works even exported pig-iron to California in
1868, the^rst 230 tons realizing £% and per ton. But,
in spite of the coming of the railway to Mittagong in 1867,
the company collapsed in 1870. Its plant and land at
“New Sheffield” were sold by auction for ,(^10,000. In
the blast-furnace’s last and most productive run, February
1876 to March 1877, it produced 3273 tons of pig-iron,
52 tons of which were made into “merchant-bars”, the
wrought iron that was the raw material of the ubiquitous
village blacksmith. But by that time another scene had
been chosen for Australia’s “black country”, namely
Lithgow, on the way from Sydney to Bathurst, and James
Rutherford, of Cobb & Co., had turned his organizing
brain to the making of iron.

The Eskbank Iron Works, managed by Enoch Hughes
who had led the venturers to this more favourable

^ See article on “Goal” in the Australian Encyclopaedia^ vol. i, p. 274;
Essington Lewis, “Iron and Steel Industry in Australia”, pp. 31 et seq.
{Proceedings of Engineering Conference, Newcastle 1929) ; and F. R. E. Mauldon,
Economics of Australian Coal. The attention of students may also be drawn
to an interesting study by Louis Hunter of “The Influence of the Market
upon Technique in the Iron Industry of W. Pennsylvania” {Journal of
Economic and Business History, February 1929).

* G. V. Portus, Cambridge History of the British Empire, voL vii, ch. ix.

HOW TARIFF PROTECTION GROWS 419

scene, set out like its predecessor to smelt pig-iron
from the native ore. But as in so many other European
callings, including wool-growing and wheat-culture, a
simple transfer to Australia of the ways that had served
in the old lands did not bring success.

Gradually the emphasis in the works at Lithgow turned
to the puddling and rolling of imported pig and scrap
iron into ‘‘merchant-bars’*. Production of local pig-iron
ceased in 1882, and a little later Rutherford “blew down”
the blast furnace and melted up the ironwork in order to
put away further temptation to lose money. Government
orders for the rolling of rails from scrap offered the best
business. Such “parasitic capitalism” did not satisfy
Rutherford. His plans for rolling and galvanizing sheet
iron having miscarried through the removal of an import
duty, he sold out to William Sandford, a Bristol man whom
Lysaghts had sent out to run a wire-factory at Parramatta.
Paying his men by piece-work and on a sliding scale,
Sandford stuck to re-rolling old rails and imported steel
blooms. He extended his mills for rolling merchant-bars
and boasted, at a political banquet in honour of some new
plant, that the Eskbank works could produce 245 sections
and sizes from iron or imported steel.

But the days of the general utility smith and his bar-iron
were passing. That iron had been malleable, hot or cold,
and easy to weld, a commodity of high quality and dear
in production but not of exactly defined composition. The
day of specialized steels, each with specific characters
adapted to a certain use, was coming, and with it the need
of the highly trained iron-master.^ Cheap steel rails from
abroad put a stop, by their superior strength and dura-

^ “To produce wrought iron of general merit was comparatively easy
but expensive’*, writes an American historian of a similar time of transition
at Pittsburg, Louis Hunter, Journal of Economic and Business History y February
1929, p. 279. “To produce iron of specialized quality was very difficult,
but, if successfully accomplished, resulted in a material reduction of cost.
A first requirement for the control of the quality of the product was an
exact knowledge of raw materials.**

27'2

420 HOW TARIFF PROTECTION GROWS

bility, to the re-rolling of old iron rails at Eskbank. Not
lacking courage, Sandford set up a Siemens four-ton open
hearth furnace and in April 1900 turned out the first
Australian steel. Again a political banquet was held, and,
a little later, there was much talk of a London company
with £y30,ooo capital which would greatly extend the
industry. But an Iron Bonus Bill proposed by the first
Federal Government came to nothing. With it ended the
company talk. There were other ways, however, of
obtaining a sheltered market, and in September 1905
Sandfords Limited obtained a seven years’ contract to
supply the New South Wales government’s requirements
of iron and steel. Two days after the signing of the con-
tract the works manager went to Britain to purchase plant
and expert assistance. With their aid a great new blast-
furnace at Lithgow began again the smelting of ‘‘native”
ore froni CTarcoar in April 1907. Before the year was out,
however, the firm was in difficulties. Costs had mounted,
and a second Iron Bonus BiU had been vetoed by Mr
Deakin’s socialist allies; they favoured direct nationaliza-
tion. Sandford appealed to the public to subscribe funds
to carry on his great work; the public fought shy of it, and
his bank foreclosed. G. and C. Hoskins, a Sydney firm of
boiler-makers who had made the locking-bar pipes for the
Coolgardie Water Scheme, bought the Eskbank property
in January 1907. After an experiment with bigger plant,
the new firm turned away from the puddling and rolling
of wrought iron, to concentrate on steel.

The enterprise of the Hoskins in replacing small furnaces
and mills by large ones was stimulated in December 1908
by the passage of a Manufactures Encouragement Act,
offering bounties on the production of pig-iron from
Australian ore, on bar-iron from such pig-iron, and on
steel and galvanized sheet. Their business grew apace.
Payments to the New South Wales Railways for freight
rose frona ;^28,7oo in 1908 to ^^98,000 in 1914. Veins of
mullock in the Carcoar deposit of ore led them to try a

HOW TARIFF PROTECTION GROWS 421

fresh supply at Tallawang near Mudgee, and later the big
ore beds at Cadia, out towards Orange.^ A second blast-
furnace swelled the out-turn of pig-iron from 30,393 tons
in 1908 to 75>i5o in 1914. The various State govern-
ments developed a habit of granting, over and above the
prices, duty paid, quoted by British firms, a preference of
10 or 15 per cent, to Australian tenders; this helped.
The Lithgow mills rolled the first steel rails made in
Australia for the East-West Transcontinental Railway. The
number of men on Hoskins’ pay-roll trebled between 1908
and 1925, and their plant began to take the shape of a
modern integrated iron and steel works.

19253 however, another Richmond was in the field.
A steel enterprise, planned before its inception on up-to-
date lines, was assembling its materials from the most
accessible sources in Australia and serving the Australian
markets by sea.^ When, in 1928, Hoskins erected at Port
Kembla on the south coast a blast furnace of American
design and planned a complete iron and steel plant at
tide-water,^ they were following the earlier lead at New-
castle, north of Sydney, of the Broken Hill Proprietary
Company.

Between 1900 and 1911 the “B.H.P.” had used in its
lead-smelting at Port Pirie (S.A.) iron ore from two large
deposits called Iron Knob and Iron Monarch, close to
the coast on the other side of Spencer Gulf. A trial

^ The Garcoar ores were limonite and hematite, with occasional patches
of magnetite. The manganese content varied from 0 5 to i'5 per cent. The
Tallawang ore is magnetite. Those from Cadia arc mostly hematite carrying
from 50 to 62 per cent, of iron with a very low manganese content. The
missing manganese was supplied from Grenfell.

* Be it noted that the new works thus combined American ideas of mass-
production with the advantage of sea-carriage that has enabled British
steel-masters to hold so long their position in export markets. With a German
degree of technical and “rationalizing** skill the B.H.P. works should be
formidable competitors in free markets.

® This enterprise, under the name of the Australian Iron and Steel
Company Limited, involved a combination of Hoskins Ltd. with Dorman
Long & Go., Baldwins (England) and Howard Smith Limited, with a nominal
capital of five millions.

422 HOW TARIFF PROTECTION GROWS

made at Port Pirie in 1907 showed the ore capable of
producing excellent pig-iron, and in 1911 John Darling,
the Chairman of the Company, knowing the life of even
such a wonderful producer as its Broken Hill mine to be
limited, announced that its manager, G. D. Delprat, was
to visit Europe and America in search of information and
experts “for the development of industries kindred to our
resources, as yet barely touched upon”.^ In this search
Mr Delprat was embarrassed at times by a readiness in
those of whom he asked advice to offer their own services
to the great company he represented, but finally he found
in Philadelphia the man he was seeking, David Baker,
an engineer of New England origin and training, and of
wide American and Canadian experience.

Land had long before been acquired (1896) at Newcastle
(N.S.W.), close to the main coalfields of Australia. There,
on a site ^larged to 1100 acres by purchase and by re-
clamation from mangrove swamp, the first units of the
steel works arose in the year 1914. They comprised a
350-ton blast furnace, 66 by-product coke ovens, three
65-ton basic open hearth steel furnaces, a 35-inch blooming
mill and a 28-inch rail and structural mill. Nearly a
million sterling had been laid out at Newcastle and Iron
Knob when in January 1915 the first shipment of iron ore
was unloaded from the Company’s steamer, ‘Emerald
Wings’, at its Newcastle wharves. The blast furnace was
“blown in” on 9 March 1915, a month later steel ingots
and six weeks later steel rails were produced. War-time
demands caused a rapid expansion of the plant. In the
year ending i December 1927 it consumed 692,208 tons
of ore, from the quarries and crushers on Spencer Gulf, in
turning out 416,532 tons of pig-iron, from which 387,929
tons of steel were made and re-made into a great variety
of shapes and sections at subsidiary works that have built
themselves around the Newcastle site.

^ See The Iron and Steel Industry in Australia^ by Essington Lewis, Managing
Director of the B.H.P. Go., loc. ciU pp. 15 et seq.

HOW TARIFF PROTECTION GROWS 423

But a change has come in the circumstances of the Pro-
prietary. It began operations at Newcastle on estimates
which were expected to make it independent of tariff
assistance. In quantity, quality and accessibility the iron
ore deposits in South Australia, the limestone from the hills
by the Don River near Devonport, Tasmania, and the
low-sulphur coking coal at Newcastle, when assembled
by sea-carriage made cheaper by the back-loading of coal,
promised success on economically sound lines in free
competition with the world. The first contract for coking
coal used in the blast furnace plant was seven shillings
per ton delivered at the works. Then over the pall that
drifts high above its forest of stacks there descended the
deeper fog of war; and its great wheels, for all their might,
were caught in the labouring machine of the New
Protection.

The tall chimneys did not cease to smoke. Orders came
thick and fast to Newcastle as to all the world’s steel
plants. Australia did not go short; the Transcontinental
Railway was built mainly with B.H.P. rails. Rails and
munition bars were sent even to France and Britain. But
costs mounted. Fresh plant had to be installed at war-time
prices and wages rose steadily. The Company purchased
coal property and began to sink its own shafts; but this
could save it only coal-mining profits. Legal regulation
and union enforcement of shorter hours and higher hewing
rates were making Newcastle coal dear to win.^

In such circumstances it is intelligible enough that the
Inter-State Commission recommended in a majority report
a step which the authors of colonial tariffs before federation
and of the federal tariffs of 1904 and 1908-1 1 had hesitated
to take, viz. the imposition of import duties on pig-iron
and on iron and steel products.^ Only the Hoskins of
Lithgow had applied for such duties, but the majority

' See F. R. E. Mauldon, Economics of Australian Coaly passim.

* Comm. P.P. sessions 1914-17, vol. v, pp. 1602 et seq. Pre-war duties
are tabulated on p. 1678.

424 HOW TARIFF PROTECTION GROWS

Commissioners satisfied themselves by an examination of
the Broken Hill Proprietary Company’s costs up to 30 April
1916 “that without tariff assistance this company cannot
compete in other markets than New South Wales, the state
in which its works are situated, beyond the stage of pig-
iron and even in that particular item it may with free
imports be limited in its area of distribution in normal
times”. The Chief Commissioner was for helping the in-
dustry through infantile weakness by continuing the
system of bounties tmd looking into the problem of inter-
state shipping. His colleagues conceded that where an
article is the raw material for secondary industries, and its
manufacture in adequate supply is likely to take time,
“encouragement by bounty means the least burden on
secondary' industries and the community”. But the bounty
method indicated, they thought, an expectation that the
industry wdfild ultimately be able to do without assistance.
This, they held, was not the case with iron and steel.
“Under the conditions which at present exist in Australia
(that industry) cannot continue without help. . . . Any
scheme of assistance by bounties would be, in our opinion,
an altogether insufficient assurance to capital and enter-
prize that a determined and permanent settled policy had
been instituted by Parliament. Import Tariff duties, on
account of their more permanent nature, are considered
the only appropriate means of assistance for an industry
which has advanced to a stage when successful develop-
ment is assured under reasonable protection.” 1
Reasonable protection as a determined and permanent
policy, however, has a knack of leading its devotees on
and on. The Commissioners regretted that for lack of
time their investigation had not “comprehended” “the
effect that any alteration in the Tariff would have upon
the many branches of engineering and allied trades as
well as upon other industries”. Yet they did not hesitate
to recommend the imposition of duties on pig-iron, of
* Comm. P.P. sessions 1914-17, vol. vi, pp. 1626 et seq.

HOW TARIFF PROTECTION GROWS 435

I’js. 6d. per ton in the general, 12s. 6d. per ton in the
preferential tariff. This led to a recommendation of duties
on scrap iron because it competed with pig-iron; also to
iron and steel ingots, blooms and billets. “If steel billets
and blooms are left free of duty it may better pay the
manufacturers of plates, etc. in some of the principal centres
to import billets and blooms rather than use those made
from Australian ore. Imports can come direct to any
port.” Thence to iron and steel bars, rods and angles.
“If a duty were put on steel-blooms and scrap without
putting a duty on manufactures it would seriously affect
the present rolling mills.” Such duties, they knew full
well, would “have to be taken advantage of to some
extent”. The duties they suggested on steel rails would
be a burden on the public railways. The representatives
of the New South Wales Public Works Department were
not slow to impress this on the Commission.

“I weep for you”, the Walrus said:

“I deeply sympathize!”

Perhaps prices would rise only “until increased output,
better organization and other factors reduce costs”. The
Federal Parliament, not unmindful that “other factors”
included the legal definition of wages and conditions, went
beyond the Commission’s lead. Scope was left for future
industrial awards by the imposition of much heavier
duties than those recommended, on almost every item of
the tariff affecting iron and steel. ^

“The mighty current of a popular movement”, Ranke
noted, “carries along with it even those who seem to
direct it.” The surging nationalism of war-time, main-
tained at high tide by the discussions after the war of
international relations in the Pacific, made Australians
ready to pay any price their trusted leaders asked “to
make this great Continent independent of outside supplies

* Customs Tariff Acts, especially no. 25 of 1921.

426 HOW TARIFF PROTECTION GROWS

of iron and steel”. Moreover, the tactical skill of the
Prime Minister (Mr W. M. Hughes) in imposing the new
tariff of 1921 at a time when wholesale prices in Britain,
Europe, and America were tumbling down, masked
from the Australian public the burden of the new duties.
For Australian prices actually fell between August 1920
and December 1921 — though maintained at a level higher
than those in other lands.^ Facts, for all his skill, have
proved persistent critics of popular feelings. In a hundred-
and-one ways Australian primary producers have felt the
strain of this discrepancy between price-levels in their
home and their oversea markets. Like their ancestors in
the old land, they are great users of iron and, whereas the
price of pig-iron at Lithgow rose by 62-6 per cent, between
1914 and 1927,^ the average of British iron and steel prices
was in 1928 less than 13 per cent, above the pre-war
average. ' Iff Australia, it seemed, the advantages of im-
proved technique which elsewhere percolated to the con-
sumer, were mortgaged for the employees of town factories
and public utilities. Here was fit matter for consideration
by a new Board.

^ See D. B. Copland, “The Economic Situation in Australia 1918-1923
in The Economic Journal^ vol. xxiv, p. 38.

^ See Table on p. 15, Essington Lewis, loc. cit.

CHAPTER XXIV

“Protection All Round”

SINCE 1913 the place held by the primary producers’
leaders in the State and Commonwealth legislatures
has reflected the growing importance as exports of
wheat and dairy products. Unlike the pasturing of stock
for their wool, hides and meat, these industries keep the
countryside moderately well peopled. The Country Party
came determined to play a lone hand and to sway the
parliamentary balance in the interests of the “man on the
land”, much as the Labour men had done twenty years
earlier. Farmers sold their produce, other than sugar-
cane, at values that fluctuated in unsheltered markets.
They objected to both tariflF-raising and wage-fixing.
Whether such policies raised town standards of living or
not, they certainly piled up transport and farming costs.
The Country Party sought to free the farmer’s costs of
uneconomic burdens. The man on the land resented being
neatly robbed of the reward of his increased efficiency, and
meant to “warn off” both protected manufacturer and
privileged labour.

But the statesman who can compel or induce a de-
mocracy to face unpleasant facts is a rare product.
Farmers in annual conference sought to evolve a policy
and a leader from a political machine modelled largely
on that of Labour, but most of the leaders^ they tried

^ The co-operative activities of Australian farmers which should have
educated such leaders have been curiously patchy. Study of the “Eudunda
Farmers” in South Australia and of the “Westralian Farmers” in Western
Australia are needed. Rather unfortunately the ablest of the co-operative
leaders, having dealings with successive governments of different colour,
think it imperative that they should “keep out of politics”.

428 ‘‘PROTECTION ALL ROUND”

in Parliament became, like Labour after 1907, pupils in
the Victorian school of political conjuring. The first step
in their education as new-protectionists was the appoint-
ment, in lieu of the defunct Inter-State Commission, of a
Tariff Board.

At the election of 1919, the Prime Minister (Mr Hughes)
promised a protective tariff so hedged about that the
cpnsumer should be secure against “profiteering” prices.
The Tariff Board was to do the hedging.^ This expert
body would study the effects of the tariff on Australian
industries. Was a manufacturer acting in a manner which
resulted in unnecessarily high prices being charged to the
consumer? The Board would “deal with” him. The
Minister must refer to the Board “the necessity for new,
increased or reduced duties, and the deferment of existing
or proposed duties”. So formidable did the new Board
look that 'aiiP ardent Nationalist who, in subsequent years,
earned as Minister for Customs the title of “high priest
of protection” voted against the Bill on its second and
third readings. But personnel and tenure are important
matters; the first Board, appointed for two years only,
consisted of a customs official as chairman, a Victorian
manufacturer and an importers’ representative.

In its youth, reviewed in its annual report of June 1923,^
the Tariff Board showed a tender solicitude for soldier-
settlers’ needs. Wire-netting, fencing- wire and galvanized
iron it held to be “goods absolutely essential to the primary
producer starting out to bring under control and cultiva-
tion large tracts of country, much of which was in a virgin
state”. On its initiative the Government placed these
commodities on the free list and talked of a bounty to
manufacturers “providing for them a protection equal
to the then duty”. Before a year had passed, but after

^ See “The Tariff Board of Australia”, by R. G. Mills, in Ths Economic
Record, May 1927, pp. 52-81. Proposals for a further re-shaping of the
Tariff Board are outlined in The Australian Tariff: an Economic Inquiry
(1929), parts X and xi.

® Comm, P,P, session 1923-24, vol. ii, p. 1687.

“PROTECTION ALL ROUND’’

429

a political crisis, the Board, finding that the principal
Australian manufacturers had accumulated a stock of
several thousand miles of wire-netting, reported that British
wire-netting was being “dumped ” into the Commonwealth
to the detriment of an Australian industry. Hastening to
the aid of the new suppliant, it recommended the im-
position of a dumping duty on cheap wire-netting under
Section 4 of the Customs Tariff (Industries Preservation)
Act 1921.^ Free imports of the pioneer settlers’ necessities
were promptly and effectively stopped.

In its second term, with its personnel reinforced by a
representative of the primary producers, the Tariff Board
made an elaborate inquiry into the agricultural imple-
ments industry .2 The information as to their costs sup-
plied by the Auscralian manufacturers, “confidentially but
in full detail”, satisfied the Board that these gentlemen
were not charging excessive prices. On the contrary, not
only had they provided implements adapted at all points
to local requirements, but their activity and enterprise
had also been a valuable check upon the monopoly which
American exporters might otherwise have built up, in the
supply of mass-produced implements from Canada and
the United States. Treatment so good when applied to one
secondary industry, they argued, should be extended to
all. The Board found it “impossible to imagine that any
secondary industry can carry on without protection in a
country where it is the policy to protect secondary in-
dustries, where the standard of living is high as the result
of that protection, and where the volume of output is
restricted through the absence of a large home market”.

^ No. 28 of 1921. Section 4 provided that if goods exported to Australia
of a kind manufactured in Australia were being sold to an importer at an
export price less tlian the fair market value of the goods and to the detriment
of an Australian industry, the Minister, after report by the Tariff Board,
might after gazettal impose a special dumping duty representing the
difference between the fair market value of the goods at the time of shipment
and the export price.

® Comm. P.P. session 1925, vol. ii, p. 1891, Report of the Tariff Board on
Agricultural Implements.

430

“PROTECTION ALL ROUND”

The Country Party leaders lacked either the skill or the
courage to reason with such logical fellows. They faced
a nation hypnotized by a myriad press articles into sub-
mitting to the protection of all secondary industries as the
settled national policy. They did not distinguish between
a cost of living made high for all by this policy and
standards of living raised for some but depressed for
others. They proceeded rather to claim the extension of
the national policy to the primary industries as well. The
home market might not be large enough for the manu-
facturers’ ambitions of output, but protection had made it
a lucrative field for them; and it consumed more than
half of the total value of Australian primary products.
Why should not the primary producers enjoy a sheltered
market there too? The national policy of protection,
having taken Labour under one wing, could surely find
room unde^he other for its older allies the farmers. It
had already befriended the sugar growers, and war-time
expedients had shown how “orderly marketing” might
proceed. Out of such beginnings rose the ideal of protec-
tion all round.

During the war, truly, wool had been appraised and
wheat pooled under the compulsory powers of govern-
ment. This war-time marketing and distribution of essential
commodities was held necessary to prevent their diversion
from the resources of the allied powers. It was facili-
tated by the concentration of shipping under a single
Allied Shipping Control. Beyond doubt it had saved the
premier industries of Australia from ruin.^ Five hundred
million bushels of wheat were handled by the Australian
Wheat Board’s agents, including Farmers’ Co-operative
Companies, during the five seasons of the Board’s control.
Nearly two-thirds of this were sold to the British Govern-
ment at an average price of 4J. 8'8(/. a bushel delivered
in Australia, a figure well above those ruling before 1914.

^ Vide The Round Table, December 1920, pp. 183 etseq., September 1921,
p. 931, and F. R. Beasley, Open-Marketing v. Pooling in Australia, passim.

“PROTECTION ALL ROUND”

431

Though there were indignant snorts from some when
British ministers referred to the price paid for this wheat
as evidence of Australian farmers’ patriotism, those farmers
were mightily impressed by the machinery of mass-
marketing made practicable by the simplified commerce
of governments at war. After the war, both by the com-
pulsion of friendly state governments in Western Australia
and Queensland and on a voluntary basis in all the states
growing wheat for export, wheat pooling continued.^
Despite fluctuating support, the farmers’ leaders built up
machinery both for sale through a seasonal pool in each
state and for cash sales through co-operative companies
as wheat merchants. In doing so they entered, in Western
and South Australia, into financial co-operation with the
British Co-operaiive Wholesale Society. But some, notably
in New South Wales, hankered for a sheltered price in
the home market.

Four Australian wool-clips were purchased by the
British Government at an average price of 15^^. per
pound, plus half of any profits it might make from re-sales
for civilian use. The total quantity was over seven million
bales.^ At the end of 1920, however, after the British
Government had paid the agreed price to the credit of
the Australian Central Wool Committee, it found itself
with a considerable sum in hand as profits of civilian sales
and with a surplus of nearly two million bales of Australian
wool, half merino and half cross-bred. As it had also
770,000 bales of New Zealand cross-bred wool, this was
indeed an embarrassment of riches. Wool-growers, wool-
brokers and wool-buyers had all worked harmoniously and
with brilliant technical and administrative success in sub-
stituting mass-purchase and appraisement for the older

^ Sec F. R. Beasley, op. cit. pp. 40-45, and Commonwealth Tear Book,
no. 21, p. 1021. Compulsory pooling ceased in Western Aastralia in 1922.

* 7» 1 54)^2 1 bales weighing in all 2,486,721,753 pounds, worth at the
flat rate of some ^160,600,780. See Comm. P.P. sessions 19 14-17,
vol. V, p. 1 1 59, for notes by J. M. Higgins on the Broad Principle of the Wool
Scheme.

432

‘‘PROTECTION ALL ROUND»

auction-sales in Australia and London. The British Govern-
ment had no longer need or wish to control the purchase
of the Australian, New Zealand and British wool-clips.
Over the market, however, there hung at the resumption
of free auction-sales this mighty stock of old wool as well
as the 1920-21 clip. In all, the visible supply was over
three million bales. ^

^ A marketing plan for the transition period was hammered
out by Sir Arthur Goldfinch, the Director of Raw Materials
for the British Government, in conference with representa-
tives of both wool-growers and brokers. It took shape as
a great joint stock company whose name stated its func-
tion, the British Australian Wool Realization Association
Limited. Nick-named ‘‘Bawra’^ with perhaps the sug-
gestion that it was first cousin to ‘^Dora’’, the Association
was registered on 27 January 1921 as a Victorian com-
pany. To iibthe British Government, through that of the
Commonwealth, transferred the cash and the unsold wool
remaining from its war-time monopoly. Valuing this wool
at 40 per cent, less than its appraised value — for prices
had slumped heavily under the pressure of deflation at
home and the shadow of such stocks — Bawra distributed
wool-certificates and shares in its assets to all growers who
had contributed wool to the total appraised in proportion
to their contributions.^ The slump in the wool auction-
rooms, bordering on panic, was stayed by a Common-
wealth ‘‘war-time regulation”, 9 May 1921, setting 8(/.
a pound as the minimum price at which wool might be
exported. Bawra then proceeded, not always with the
concurrence of wool-selling brokers, to put up its stocks

^ For an excellent review of the war and post-war marketing problem
see the Economic Record^ February 1928 Supplement, article “Bawra”, by
E. G. Dyason. Though further research among the papers of the Central
Wool Committee and Bawra, in the Library of the School of Commerce
at the University of Melbourne, may possibly modify some of the conclusions
therein contained, the author of the article was exceptionally well placed
and qualified to analyse the events and forces which he appraises.

* The British Government also appointed Bawra its agent in the sale of
its stock of New Zealand wool.

‘‘PROTECTION ALL ROUND’’

433

at monthly auction sales mainly in Britain, carefully
rationing the market and setting reserves on its offerings
according to its estimate of growers’ costs in producing
the concurrent new clips.^ After August 1922 the wool-
selling brokers refused to be bound by the Association’s
allocation of quantities of wool, old and new, to be sub-
mitted at the Australian auctions. The plan’s success, how-
ever, in removing the fear of unlimited offerings, had by
then made possible a sharp recovery in prices, especially
for merino wool.

At the end of that year, when Bawra’s distributions had
reached sixteen millions sterling, Sir John Higgins, its
Chairman, proposed that the shareholders should use its
remaining assets, estimated 10 be worth to them six millions
more,^ as an insurance fund for the protection of Australia’s
pastoral and agricultural industries. Sir John, a “self-
made” business leader of Cornish origin and Phoenician
ability in finance, talked to a meeting of over 500 share-
holders, of setting up central re-conditioning works, of
grading every lot by type and yield, of abolishing draftage
— that old mystery that makes the wool-growers’ hundred-
weight only III pounds when he sells his wool — of allocat-
ing quantities for auction and of mass-bargaining about
freights. By such means he held that a central organiza-
tion with a capital of six millions might “increase the
returns from a normal Australian wool-clip by £2,500,000
to £3,500,000 or eight to ten per cent, of its present
value. . . . The important factor — the material gain — would
be in the enhancement of the value of the wool production
of the Commonwealth”. His proposals were summarily
rejected by an adverse vote, without discussion. The
powerful wool-selling brokers were active in hostility to

^ Dyason, loc. cit. p. 59 : “ On many occasions the Directors of B.A.W.R.A.
refrained from putting their full quota on the market and in some cases
suspended sales altogether for a period”.

“ It must be noted that as under the original agreement for the acquisition
of the Australian wool, a half share in the assets realized by Bawra belonged
to the British Government.

s H

434

“PROTECTION ALL ROUND”

them, for they were not ready hghtly to submit their
excellently run and lucrative businesses to a central control.
But in opposing Sir John Higgins’ great ‘"rationalization”
they played upon a responsive instrument. The vast
majority of pastoralists mistrusted anything that would
put their wool nearer to the grasp of governments in whose
policies they have seldom had part or trust. Sir John
Higgins disclaimed any association between the co-opera-
tive company of his dreams and government control. Yet
save by fiat of the Commonwealth Government, how could
his central organization obtain or retain such control of
Australian wool as would be needed for its purpose of
mass-marketing? Mr Dyason, as “the student”, “is left
with the conviction that the Australian wool industry as
a whole lost an opportunity, which is unlikely to recur, of
creating a powerful instrument for its own advancement”.

Bawra ^Jftrtainly served the wool industry well. It dis-
tributed over thirty millions as the Australian wool-
growers’ quota of the wool salvaged from the war. But
the results of other ambitious plans outside Australia for
the advancement of values in the world’s markets tempt
one to regard the veto on its continuance as an equal
service. Merino wool is grown in South Africa. How long
would Sir John Higgins’ disclaimer of any attempt to
“uphold unduly the price of wool” have held good in a
sense acceptable to the users of wool? Who would have
decided what was due?

Other groups of the primary producers showed no liking
for free or open marketing. They had before them an im-
pressive example in sugar of the power of an organized
industry, based upon an Australian primary product, to
secure special prices through a sheltered local market.

Even before federation, the Colonial Sugar Refining
Company had shown its political influence in a successful
resistance to G. H. Reid’s proposal (1896) to remove the
long-established duty on sugar. The Company had in the
early ’nineties stood up with resource and courage to the

“PROTECTION ALL ROUND’’

435

attacks of bounty-fed German sugar in its Australasian
markets. Fighting funds had been set aside without detri-
ment to the annual rate of dividend, and prices had been
cut by 3^2 to 3^3 per ton in the colonial markets.^ But when
Reid proposed the abolition of the duty on sugar imported
into New South Wales, a duty dating back to 1855, the
impending destruction of the industry was loudly pro-
claimed— “a result which those who wish to place in the
hands of German importers a large share in the sugar
trade of New South Wales will naturally view with satis-
faction”. Contracts with farmers on the Northern Rivers
for sugar-cane were cancelled. Inquiries were set on foot
with a view to “utilizing our N.S.W. plant elsewhere”.
Reid bowed to this storm of opposition; at his advice
Knox was knighted in 1897 and the reduction of the duty
below 3(^3 a ton was stayed.^ The Company’s inspecting
chemist. Dr Kottmann, went to inquire about new pro-
cesses in France and in Germany. Knox, a native of
Denmark, had himself been educated at Liibeck, though
too soon to have imbibed from List his skill in nationalist
economics.^ The usual dividend was declared, free of the
new income tax. Sixteen thousand tons of Australasian
sugar were exported to British Columbia, Hong-Kong,
London and Japan, and shareholders were offered the
right to provide 170,000 fresh capital to replace the
debentures redeemable in 1899 and 1900. They were not
slow to respond.

The old chief died on 7 January 1901 at the sunrise of
the Commonwealth, but his creation, the great C.S.R.

1 C.S.R. Co. Reports (Mitchell Library), Chairman’s statement for half-
year ending 31 March 1895. Apart from their economic significance Knox’s
statements have a rare charm as a revelation of his vigorous personality.

* “The area under sugar-cane in New South Wales reached its maximum
in 1895-6 with a total of 32,927 acres.” It then fell gradually to 10,490 acres
in 1918-9. Commonwealth Tear Book, no. 6, p. 392, and no. 20, p. 675. The
farmers on the Northern Rivers have found dairying more lucrative than
sugar-growing, though in recent years high prices for sugar have attracted
many back to the old crop.

* For a short biography of Sir Edward Knox, sec Australian Encyclopaedia
(second edition), vol. i, p. 704.

28-2

436 “PROTECTION ALL ROUND”

Company, entered the new arena armed cap-d-pie. Since
1889, 1, 1 00, 000 had been added to its paid-up capital
and applied mainly to the reduction of interest-bearing
liabilities. It had virtually withdrawn from direct cultiva-
tion of sugar-cane in Australia, leaving this to white
farmers. In times of drought it could draw upon supphes
of raw sugar grown on its own plantations in Fiji or upon
outside supplies from Java. With inter-state free trade it
expected to concentrate the work of refining “to a larger
extent than heretofore, at any port where the existing
conditions allow of the refining work being conducted at
the lowest cost”.^ But federated Australia regarded other
aims as superior to the economies of concentration. One
of the earliest acts of the national Parliament put a stop
to the importation of Kanakas and made provision for
the deportation of any in Australia after 31 December
1906.2 Td^encourage sugar production by white labour
an Excise (Sugar) Act 1902 offered as a bounty on sugar-
cane so grown a rebate of two out of the three pounds a
ton excise levied on manufactured sugar.^ The proportion
of Queensland sugar grown by coloured labour fell from
85*5 per cent, in 1902 to i2-ii per cent, in 1909. The
tariff protected the sugar industry by an import duty of
£6 per ton on raw or refined cane-sugar, and £10 per
ton on beet-sugar. Thus the white sugar men in New
South Wales and Queensland enjoyed a net protection
of £^ per ton, paying in effect only £i sl ton as excise.
Yet they were far from being happy. The Commonwealth
Statistician recorded decorously in 1912 that the system
of rebates was producing “effects not anticipated at the

^ C.S.R. Reports (Mitchell Library). Statement by the Chairman, H. E.
Kater, for the half-year ending 31 March 1901.

^ The Pacific Island Labourers Act, no. 16 of 1901, especially 8 (i). Of
9841 Kanakas in Queensland on 31 December 1901, 9269 had been deported
by 21 December 1909.

® P. A. K. Ewart, in Melbourne Stock Exchange Record y February 1 929, contends
that the bounty was “in no sense paid out of the taxpayers* funds inasmuch
as it was paid from a fund collected from the sugar producers themselves”.
By parity of reasoning customs duties are only taxes on warehousemen !

‘‘PROTECTION ALL ROUND’’

437

time the legislation was passed, and that the greater part
of the cost of substituting white for coloured labour was
thereby being imposed on the States engaged in the in-
dustry, instead of being a charge upon the whole Common-
wealth”. Bluntly the sugar-growers complained that with
unions forcing up the men’s wages and the refining com-
panies determining the price they would pay for cane —
according to sugar-content but by monopoly power — no
good came to them from either protection or bounty. In
1912 both excise and bounty were repealed on condition
that Queensland prohibited by state legislation the em-
ployment of coloured labour in the industry. Simul-
taneously the state set up machinery to fix the wages of
sugar employees. The position of the cane-growers between
the upper and the nether millstones of refineries and
organized labour remained unattractive. The area under
sugar-cane fluctuated but increased little between 1905
and 1914.^

At this stage the industry aimed only at the service of
the Australian demand at Australian prices.^ Its uneasy
poise was rudely upset in 1915 by the effects of drought
and war, but was propped up again on more attractive
supports by the state and federal governments. Early in
the war, state price-fixing boards fixed the price of sugar,
among other commodities. The figure named was con-
siderably less than the market price outside the Common-
wealth which had been affected by the blockade of Central
European supplies of beet-sugar. But Australia had sugar
troubles of her own. Dry seasons in Queensland and New
South Wales had sharply threatened supplies. The fixed
price at this juncture made it impracticable for the
C.S.R. Company to adopt the plan used in former years
of shortage, viz. of importing raw sugar from Java or Fiji,
refining it and putting it on the Australian market at a

^ See Australian Production Statistics, Bulletin, no. 20, p. 204.

* Cf. Edward Knox’s reflections on expanding production, C.S.R,
Reports, 31 March 1895 (Mitchell Library).

438 “PROTECTION ALL ROUND”

price reflecting the outside value of sugar. To do so in

1915 would have meant a loss of a ton. The Federal
(Labour) Government, obsessed by the dogma that value
should bear an invariable relation to cost of production,^
was anxious to prevent the C.S.R. Company from increasing
the value of the Australian sugar in its possession above what
ministers held that it had cost. Early in May, however,
it became known that the stocks of Australian sugar, freely
consumed at the fixed price, would be exhausted in July.
The Federal Government then purchased, through the
C.S.R. Company, the Java sugar needed to tide the
domestic demand over the period of shortage, until the

1916 sugar crop.

Once having entered the sugar business, federal govern-
ments found it hard to draw back. In July 1915 Mr Hughes
(then Attornojj-Gencral) purchased the raw sugar from
Australian growers and central mills Sit per ton, and
employed the C.S.R. and Millaquin Sugar Companies to
refine and distribute it. A charge of £3. 13^. per ton was
allowed for the companies’ services in refining and handling
the sugar, plus an addition representing the cost of tinning,
canning, handling and distributing the syrup. But a pro-
vision in the agreement — 9 a, a mere afterthought —
read: “Should legislation affecting the conditions of the
manufacture or refining of the 1915 crop of sugar be
passed by any State this agreement shall be subject to
such re-adjustment as shall be agreed upon”. One Dugald
Thomson was named as arbitrator. As war-time wages
and costs rose, prices to growers had to be revised.
Scanty yields led to imports of oversea sugar, on govern-
ment account. In 1919-20 and 1920-21 these were both
extensive and expensive. The retail price was raised to
6rf. a pound.^ To keep it at that level until the govern-
ment’s costs had been recouped, a complete embargo on

^ Sec Comm, P.D, vol. lxxvi, 6 May 1915, p. 2914, statement by Senator
Pearce.

^ For a table of Australian sugar prices, 1915 to 1925, sec Commonwealth
Tear Book, no. 20, p. 678.

“PROTECTION ALL ROUND”

439

imports of black-grown sugar was imposed. Behind thk
screen of regulation the price of raw sugar to the growers
could be and was further increased. Generous prices for
cane set up a considerable expansion of the area under
cultivation. The long stagnation at between 140 and 170
thousand acres was broken up in 1921 when 197,293 acres
grew cane. In 1926—7, 280,000 acres were growing it.

On more than one occasion the Commonwealth Govern-
ment has announced its intention to terminate the embargo
on foreign sugar and to confine the protection of so pros-
perous an industry to the import duty of ,^9. 6f. M. per
ton. But Queensland occupied a pivotal position in federal
politics. The swing of its ten electorates in the House of
Representatives usually determined the fate of the federal
cabinets. Queensland state governments have been nothing
loth to support the cause of the sugar-growers. The in-
dustry has become an exporting one on a considerable
scale. Imports averaging in value £2,693,000 a year in
the five years ending June 1921 have given place to exports
averaging £1,551,800 per annum in the succeeding five
years. The exports were mainly sold in the British market
where for several years they enjoyed a preference.^ The

^ In 1928 the embargo was renewed until 1931 . N. Skene Smith, Economic
Control, part in, chapter ii, traces in detail the scheme by which prices, wages
and the right to share in this industry are “controlled”. The price of sugar
is ostensibly “fixed” by a Sugar Board consisting of “a Government
chairman, ^o growers’ delegates and one millers’ delegate”. But the
Board’s decision, so far from being a “control”, must leave room for the
prices allowed to growers and millers by District Boards. These prices in
turn are resultants of the wages granted by state wage-fixing tribunals to
cane-cutters, cultivators and millhands. The prices allowed for cane have
been attractive. Since the present system was elaborated the number of
powers has increased from 3930 in 1920 to 6730 in 1925. Since 1925
indeed, the Sugar Board and the Central Gane Prices Board have intervened
to stop expansion (i) by refusing applications from present growers to plant
new land, and (ii) by putting an embargo on further assignments of land
to new growers. There still remains the danger that present growers will
raise more cane per acre. The Queensland yield of cane is low per acre in
comparison with Java. Similarly with labour. The aim of the wage tribunals
has been “to base the wage in the industry upon a minimum as fair to the
sugar worker, with his irregular employment, as is the basic wage to an
average employee in fairly regular employment”. High piece-rates and
minima for the 44-hour week have set up a mild rush to work in the industry.

440 ‘‘PROTECTION ALL ROUND”

spread of such labour-saving devices as the tractor-drawn
cultivator has enabled the cane-grower to draw profit
despite a falling average of home and export prices.
Further economies are in sight. A motor cane-cutter,
invented by one of the Riverina Falkiners, seems to need
only the spur of necessity to bring about “alterations and
adjustments to enable it to operate successfully in heavy
crops of green cane”. The anomaly of two prices, how-
ever, one for the patient Australian housewife and the
other for freer folk oversea, whether they buy sugar neat
or in Australian jam and condensed milk,^ excites the
cupidity of other primary producers.

Another industry expanded fast during the war as a
result of charging a high price in the home market and
dumping its surplus abroad. This was the dried fruits
industry, the ?»iain homes of which are the irrigation
colonies in the Murray and Murrumbidgee valleys.^ The
earliest of these, Mildura (Vic.), established by the Chaffey
Brothers from California in the early ’nineties, the almost
contemporary Renmark in South Australia and Curlwaa
(N.S.W.) obtained water by pumping from the River
Murray. Oases of vines and citrus fruits in the dried
plains of the interior have always appealed strongly to
the Australian imagination. They excited the admiration
and hope of The Times special correspondent when, after
the Bank Smash, she watched the efforts of colonial legisla-
tures to mend matters by promoting any and every form
of land settlement. They seemed to offer so much better

even from far-away Italy. Preference to members of the A.W.U., legally
established, has seemingly been a brake upon this movement. The Court
has had occasion to warn the said Union “to be careful not to refuse tickets
to men who are qualified to become members of the Union**.

^ Manufacturers for export obtain a rebate on the sugar-content of their
goods equal to the difference between the Australian and foreign wholesale
prices, on application to an export sugar committee. In 1925-6, 56 per cent,
of the total production of sugar was consumed in Australia, at a whole-
sale price of ^£26. ioj. a ton, while the net value of the exported sugar was

1 1. 55. ^d. The average price for the whole crop was £19. los. ^d. per ton.

2 Comm, P.P, sessions 1914-17, vol. vi, pp. 898-9, Report of Inter-State
Commission on Dried Fruits, 16 August 1916.

“PROTECTION ALL ROUND”

441

opportunities of maintaining the amenities of life to which
settlers from Britain had been accustomed. “On highly
productive land, a much smaller portion suffices for the
maintenance of a given number of persons ; consequently
men live nearer together, and are able to employ their
leisure in social intercourse, at once natural and mutually
stimulating.”^

Government aid had not been stinted at any stage of
their history. Irrigation works on a large scale, spreading
water through gravitation channels over the Goulburn
and Wimmera valleys, had been undertaken before federa-
tion. Alfred Deakin, having visited California and India,
was their inspired patron. In New South Wales the
Murrumbidgee valley becamo a scene of busy preparation
after 1906. Head works and irrigation channels were con-
structed at vast expense. Money was advanced to settlers,
on the security of the land taken up by them.® Water was
supplied at rates far below the maintenance costs and
interest on the works which stored and carried it.

Yet it was early apparent that Californian irrigation
could no more be transplanted unmodified to Australia
than could English farms and factories. The settlers on
irrigation “colonies”, as Miss Shaw noted, met more
easily to “employ their leisure in social intercourse”, but
their meetings did not discover a McArthur or a Farrer.
“Their talk runs always to prices”, said Adam Smith of
all venturers’ meetings for recreation. There was much
cause on the irrigation blocks for such talk. Australian
markets for fruit and other small produce were soon
glutted. High wages and long voyages made those of
Europe unremunerative. Bounties of lo per cent, on the

1 Flora Shaw (Lady Lugard), “The Australian Outlook”, a paper read
before the Colonial Institute 1O94.

* “As a general rule, the rate of interest charged on advances to the
settlers by the irrigation authorities is lower than the rate payable by the
Government and also less than the rate charged on mortgage transactions
with the banks.” Report on Canned Fruit Industry , Development and Migration
Commissiony 1929, pp. 12-13.

442 “PROTECTION ALL ROUND”

market value of the dried fruits they exported were paid
by the Federal Government after 1907. In 1916 the Inter-
State Commission reported that an Australian Dried
Fruits Association, behind the shelter of an import duty
of 3fi?. a pound — equal to practically 100 per cent. — ^was
maintaining a high local price which, despite the usually
lower prices received for exports, gave the grower a
profitable average. It doubted, however, whether the
Association could have maintained its high local prices
save by refusing to supply its local goods to any dealer
importing dried fruits without its sanction.^ The normal
economic result of “profitable prices” followed. Con-
siderable additional areas were planted with vines and
fruit trees and Australians felt pleased at the conquest of
new oases.

During t^q^war the Murrumbidgee Irrigation Area
reached the stage of settlement. A huge storage dam at
Burrinjuck had impounded 771,640 acre-feet of flood
waters, to be spread by gravitation over 200,000 acres in
the Riverina some 250 miles below the dam. In large
part this land was reserved for returning soldiers. Still
more ambitious was a great irrigation scheme with head-
works on the Upper Murray, the construction of which was
put in hand after the war. When these were well begun,
however, men began to wonder what crops would be
profitable on the area of 700,000 acres which they would
irrigate lower down the Murray. The outlook for dried
fruits, in spite of the Australian Dried Fruits Association
and its skilful propaganda, was not clear. Both production
and exports of dried fruits were favoured by the beneficence
of the Baldwin Government in Britain, which by a pre-
ferential duty gave the Australian growers a sheltered
market oversea, where Australian costs might be covered,

1 The Commission had doubts as to the consistency of this with the
Australian Industries Preservation Act, part ii, section 4 (i), but the Chair-
man of the A.D.F.A. reassured it. “Our rules were submitted to the present
Attorney-General (the Hon. W. M. Hughes] who said that they were all
right.**

“PROTECTION ALL ROUND”

443

or, at least, an average maintained between home and
export prices that would achieve the end.^ But could this be
counted on permanently?

Governments have certainly occupied an unenviable
position as sponsors and guarantors of irrigation colonies.
Having bought land for closer settlement and added to
its cost heavy capital outlays on headworks and water
channels, their action would have been stultified outright
had they not tried to induce settlers to cultivate the land
they subdivided and watered. Successive governments have
hesitated to call a halt in a losing business so long as the
block-holders were ready to contribute some part of the
interest on the outlay. Assistance in marketing their pro-
duce inevitably followed. But inevitably settlers and
governments realized the rickety financial position of an
industry dependent for much of its market on the good-
will of governments half a world away which were re-
sponsible to constituents of their own. The number of
farms occupied on the Murrumbidgee Irrigation Area,
below the great Burrinjuck Reservoir, declined after 1924,
owing to forfeitures and surrenders.^ Work on the mightier
Hume Reservoir, on the Upper Murray, which when
completed was to impound 2,000,000 acre-feet of water,
had to be curtailed.

Country Party leaders had not hesitated, before such
portents appeared, to press for the general extension of
such plans for the “orderly marketing” of primary pro-
ducts. The Federal Government after heavy losses became
unwilling to shoulder by simple guarantees, or by “pools”
which were in effect guarantees, the financial burden of
marketing surplus produce. It favoured the constitution,
at the wish of a specified proportion of those engaged in
each industry, of a Board of Control endowed with legal

^ As to the similar subsidization of the later developed Canned Fruit
Industry see the Report by the Development and Migration Commission, 1929,
pp. 11-13-

* Mew South Wales Tear Book, 1927-8, p. 743.

444 “PROTECTION ALL ROUND’’

power to make a levy on all such producers for common
expenses of advertising and marketing.^ These legalized
cartels, soviets, boards— call them what you will — were to
control the supply put on the Australian market and to
send the balance of the production to be sold abroad at
what it would fetch. Several acts were passed during the
1924 session to implement this. With them passed an Export
Guarantee Act, authorizing the Treasury to guarantee
advances by the Commonwealth Bank to marketing boards
up to 80 per cent, of the market value of the produce
controlled.

Most ambitious was the Paterson Butter Scheme de-
vised, according to its author, ‘‘to put the producer in
exactly the same position with regard to the Australian-
consumed part of his production as would automatically
obtain if thei^^ were no exportable surplus produced”.^
Butter producers, especially on the Northern Rivers of
New South Wales and in Queensland, had long been
satisfied that they were as deserving of protection as their
neighbours who grew sugar-cane. Why should cane fed
into the rollers and vacuum pans of a sugar mill acquire
more merit in the eyes, more silver from the pockets, of
Australian consumers than the same sugar-cane, or its
cousin maize, grown alongside it at the same cost and fed
to those paragons of the breeder’s art, Strawberry and
Melba XV, the milking shorthorns? “The butter workers
are entitled to equal advantages in this supposed free
country, where justice and equity are said to dominate.”®

^ Gf. The Economic Record^ February 1928: L. R. MacGregor, “The
Queensland Marketing Plan”, p. 135; and T. Paterson, “The Marketing
of Primary Products”, p. 129.

* T. Paterson, “The Marketing of Primary Products”, in The Economic
Record Supplement ^ February 1928, p. 132. A note by J. F. Barry in the
Economic Record, May 1 926, pp. 1 1 9-2 1 , outlines the scheme as first conceived,
and in the February 1928 Supplement, Professor L. F. Giblin dissects
“Some Costs of Marketing Control”.

® John Martin, dairy farmer of Ballina, N.S.W., 24 September 1914,
Comm. P.P. sessions 1914-17, vol. vi, p. 545. The annual subsidy to sugar-
growers was then about one million sterling. According to Professor Giblin
it was £4,000,000 in 1928, Economic Record, February 1928, p. 152.

“PROTECTION ALL ROUND’’

445

In 1925 a Gippsland politician hit upon the means of
obtaining for the cow-men this fair deal. A voluntary
combination of butter-producers, known at first as the
Australian Stabilization Committee, imposed a levy of
I \L per pound on all factory butter, and out of this fund
proceeded to distribute a bounty of 3^. a pound on all
butter exported.

Exporters were naturally willing to send more butter
abroad, mainly to London. The Australian consumer, to
get his share, had to pay 3^. more than export parity, a
little bounty on his private account supplementing that
on exports financed by the butter-producers “among
themselves”. Lest greedy New Zealanders should seek to
make profit out of the impto /ed Australian market which
the associated producers had made for themselves, a duty
of sixpence a pound was raised against imports of butter
to Australia.

A profitable price, as ever, stimulated the growth of the
industry. More butter was exported, for sales abroad,
which now bore a subsidy, could be pushed so long as the
price paid by the outside buyer was within 3^. per pound
of the acceptable export price in pre-subsidy days. But
every increase in the propor tion exported made a bigger
call on the levy fund. The local price, paid on a smaller
share of the total production, had to be put higher if the
profitable average price of the dairyman’s calculation was
to be achieved. As Professor Giblin drily remarked: “It
is not altogether healthy for any industry to be able to
raise the price of its product as it desires without any cor-
responding effort”.

Once the “costs plus” system has been accepted, the
producer is lifted into a paradise where economy seems
no longer imperative. “Justice” names the price and the
other fellow pays it. Yet these “stabilized” costs have a
curious quality of restlessness. “There will always be a
considerable number of marginal producers who cannot

446 “PROTECTION ALL ROUND”

make the industry pay, and will be clamant for a higher
bounty”.^

Such local prices for butter, sugar and dried fruits raised
the cost of living in Australia and, through this, the level
of wages to a degree by no means negligible. For sugar
(460 million pounds), butter (95 million pounds) and
dried fruits (28 million pounds) are quite important items
in tte massed household consumption which guides the
Commonwealth Statistician when he “weights” prices and
calculates the index numbers industrial tribunals use. The
rising costs are passed back to the exporting industries by
all and sundry in the sheltered industries. They have no
other resort. If wheat-growers, too, should be smitten
with the brave notion of evolving a marketing plan by
which they too may receive a profitable price — an Aus-
tralian parity^, whatever that may mean — the whole
burden would fall back on wool. So would come to pass
the strange vision that fell upon the Tasmanian seer,
“of Australia as one enormous sheep bestriding a bottom-
less pit with statesman, lawyer, miner, landlord, farmer
and factory hand all hanging on desperately to the locks
of its abundant fleece

These schemes of price manipulation one and all be-
speak a hazy appreciation of the function of prices in
guiding the economic use of man’s resources. Australians
have too often legislated as though a price might be made
at whatever figure the producer in search of an easier life
chose to call “ the fair thing”. But the prices that direct the
goings and comings of sound prosperity are the signs by
which men learn from willing buyers their changing needs.
High prices encourage production where it affords a margin
of profit. Falling prices discourage it by wiping out the
margin or hope of profit. A government or board of control

^ L. F. Giblin, “Some Costs of Marketing Contror*, Economic Record,
February 1928, p. 150.

® L. F. Giblin, loc, cit, p. 154,

“PROTECTION ALL ROUND”

447

that seeks to fake the world’s prices does so at the peril of
the citizens and producers whom the faked prices mislead.
It deranges and weakens its whole economy if it forces
them to work with costs that the outer world is under no ob-
hgation to meet. And if, in doing so, it sees fit to feed other
nations with an abundance which its price-faking begrudges
to its own citizens, it adds to the strength of others and
accentuates the contrast in competitive vigour between
bond and free.

INDEX

Aborigines, at Port Jackson, i, 9 n.

pastoralists and, 99, 109 seq.y 236
Abundance, Mount (Cild.), 281
Agriculture, economic weakness of
(N.S.W.), 201, 207
effects of gold-rushes on, 185,
I95.n.

extension northwards in Victoria,
^^seq.y 220; in S.A., 224; in
Tasmania, 227
private direction of, 1 7 seq.
public, 5 seq., 17

soil-exhaustion in S.A., 225 seq.,
232

technical advances in, 226, 345 seq.
tropical, 361

Angas, George Fife, 144 seq.
Arbitration, compulsory industrial,
adopted as Labour Party plank,

368

Harvester judgment, 376 seq.
in Queensland, 37I, 384
in Western Australia, 375
Arbitration awards, extended con-
tent of, 380 seq.

readily obeyed in war-time, 403
Arbitration Court in N.S.W., 371
replaced by wages-boards, 377
Artesian wells in Western Queens-
land, 237

in N.S. Wales, 203, 303
Assignment of convicts, 7, 15, 21
limited to country districts, 1 52
Auction, sale of Crown lands by,
150, 198, 213
Australind, 141

A.W.U., and 1894 shearing strike,

369

origins of, 318

Bank advances, against wool and
stock, 107

frozen by falling prices, 308
Bank, Commercial, of Australia,
origin, 301 n.; run on, 329
Commercial, of S.A. fails, 308
of New South Wales, origin, 53
seq.

of South Australia absorbed, 328
project of a Land, 53
W.A. Agricultural, 355

Bank smash of 1893, 3^8 seq.
Banking, Colonial Office on or-
thodox, 299
“petty’*, 53

Torrens title and colonial, 302
transition to land advances, 301
seq.

Banking crisis of 1841, 106
of 1866 (Queensland), 239
of 1893, 328 seq.

Banks, and free selection, 209
Associated, and oversea deposits,
312, 328

Land, Melbourne, 31 1
multiplication of branches, 299
new, in ’thirties, 104; in ’fifties, 299
reconstruction of, 1893, 330
Banks, Sir Joseph, 4
feud with J. McArthur, 80
Basic Wage, 1919 Commission on,

383

Bass, George, and escaped convicts,
12

Bathurst, discovery of gold near, 168
B.A.W.R.A. SeeY^ooX
Bega, free selection near, 204
Bent, J. H., Judge-Advocate, 75
Berry, Sir Graham, advice to La-
bour, 365

enacts high tariff, 268
increases tariff, 1892, 334
Bigge, J. T., against Bank charter, 57
commission of inquiry, 75
Blaxlands, Macquarie’s hostility to,
72

Bligh, Governor William, 39 seq.
Blue Mountains, crossing of, 66
Boiling-down sheep, H. O’Brien and,
107

Bond-holders, and N.Qld. Separa-
tion, 251

Boom, of 1826-7, J. Lang on the,

102

of 1838-40, 104; collapse of, 189
Melbourne Land, 1888-90, 308
seq.’, banks* part in, 301
Borrowing, public, for railways, 287
seq.

after collapse of Boom, 3 1 3
“Griffin’s Horse”, 294
increase in ’eighties, 307

INDEX

Boundaries, intercolonial, power to
alter, 249 seq.

Bourke, Governor Sir R., and Wake-
fieldiacis, 190

Brisbane, Governor Sir T. M., and
Spanish dollar, 58
Broken Hill, contract “stoping’*
at, 326

silver-lead-zinc mines, 304 n.
Broken Hill Proprietary Co., steel
works, 42 1

Budget, annual, N.S.W., 336
Buggy, American, 284
Bullock transport, 281 seq.
Burrinjuck Dam, 442
Burton’s Bankruptcy Act ( 1 842) , 1 06
Bushranging, in Van Diemen’s
Land, 93

in N.S. Wales under free selection.
209

Kelly Gang (Vic.), 216
Butter, origins of export, 342
Paterson marketing scheme, 445

Cadell, Francis, navigates rivers, 273
California, “homesteading” in, 195
import of foodstuffs from, 195
Camden Park, J. McArthur at, 84
seq.

Canvas Town, Melbourne, 1 74
Capital, investment of British, 302
Carruthers’ land reforms (N.S.W.),
337

Gastlercagh, Viscount, to Governor
Bligh, 40

Child Endowment, Roy. Comm, on,

. 3®4

Chinese, alluvial gold-digging and,

180

attacks on, at Lambing Flat, 181
in Northern Territory, 280, 359
seq.

in Victorian furniture trade, 374
laws restricting immigration of,

1 81 seq,

Chisholm, Caroline, early life of, 158
founds Family Colonization Soc.,
164

Governor Gipps and, 159
immigrants placed by, 1 18
later career of, 165
lessens disparity of sexes, 16 1

449

Clearing land, methods of, 7, 221
Coaching routes. See Cobb & Go.
Goal Mines Regulation Bill, 1891,
366

Cobb & Go., 285

Colonial Office, and early governors,
28 n.

and tariff reciprocity, 275
Colonial Sugar Refining Co. See
Sugar

Commission, on Basic Wage, 383
on Child Endowment, 384 n.
Interstate, constitutional origin
of, 409; lapse of, 410; report on
iron and steel, 423; tariff in-
quiry by, 410

Communism, ship-board and prison,
j^seq., 16

Companies, Land Settlement, 136
seq.

Austral. Agric. Go., 137
V.D.L. Co., 137 n.

Conferences, Intercolonial Customs,
•272 seq.

Convict women, ill-treatment of,

Convict,, assignment of services of,
7, 15 23557., 152

in Van Diemen’s Land, 152557.,
227

in W. Australia, 150, 230
position of first batches of, 4
road-making in N.S.W. by, 283
Second Fleet’s complement of,
10

Coolgardie gold discovery, 350
Coolies, Chinese and Indian, for
Q.ld., 243

Copper mines in South Australia,

149

Country Party, economic aims of,

427

Court, High, judgment on Harvesters
Excise Act, 376-7, 399
on judicial powers, 410
Cowpastures, wild cattle found at,
30

McArthur’s grant in, 82
Crown, power of, to change boun-
daries, 249

Cunningham, Allan, explores Dar-
ling Downs, g8

INDEX

Currency, advantages over authori-
tative division, 20 seq.
“coloniar* or note-, 52
silver, 51, ^^seq.

Custancc, Principal, and soil-ex-
haustion, 226

Customs Union, projects of, 272

Darling, Governor, and the Bank, 60
an^ limits of location, 1 00
Darlmg River, discovery of, 98
free selection beyond, 205
Deakin, Alfred, and imperial pre-
ference, 400
and irrigation, 441
author of “new protection”, 398
declines office in Victoria, 332
Democracy, extension of, 183
Deposits, growth of bank, 308
British, 308 ; canvassing for, 3 1 2
Dibbs, Sir G. R., and Sydney banks,

330 ,

Diggings, population at gold, 171
Dingos, first sheep decimated by, 80
and sheep-dog breeding, 125
fencing against, 123
Dried Fruits. See Fruits
Drought, a matter of degree inland,

389

in N.S.W. (1895 to 1902), 342, 386
in Queensland, 387
in Victoria, 388
in W.A., 388 n.
natural selection and, 389 seq,
wheat cultivation and, 390
Dry-farming, 346

Duffy, G. Gavan-, and Victorian land
laws, 214

Dummying, by free-selectors and
pzistoralists, 202

in S.E. of South Australia, 224

East India Company, and Rum
trade, 36, 46, 49
Dollars purchased from, 54
Emancipists, Macquarie’s favour for,
^^seq.

Emigration, assisted, Wakefield and,
1^0 seq,
bounty, 157

conditions of pre-gold, 155
family, 163

Eureka Stockade, 1 77
Evans, G. W., reaches Bathurst
plains, 66

Exports, primary and secondary
products, 386

Factory legislation, Victorian, 372
Family Colonization Loan Society.

See Chisholm, Caroline
Farrer, Wm., wheat breeder, 346
“Federation” wheat, 347
Fencing on sheep stations, 123, 185
Fever, “Colonial” or typhoid, 170,

352

Forrest, John, ist Baron, 230, 350^^^.
Fruits, dried, 440
A.D.F.A. and prices, 442

Gawler, Governor George (S.A.),
1 46 seq,

George, Henry, visit to Australia,
322

Giblin, L. F., quoted, 444 n., 446
Gipps, Governor Sir G., and assign-
ment, 152

and Pastoral Association, 193
supports Mrs Chisholm, 159
Gold, licences to dig for, 168, 172
proposed export duty on, 1 72 seq.
value of, 1851 to 1901, 304 n.
yield, 175, J49

Gold discoveries, and self-govern-
ment, 167

at Gympie (Qld.), 240
immigration caused by, 1 73 seq.
in N. Territory, 359
in Tasmania, 229
in Victoria, 169
in W.A., 231, 349
Goldfields of W.A., railway to, 350
water supply, 352 seq.

Governors, changed economic power
of, 134

Goyder, G. W., Surveyor-General
(S.A.), 22^ seq.

Grant, J. M., and land laws (Vic.),

215

Graphs, South Australian wheat-
farming, 232

sheep and wool statistics, 394
Wimmera wheat-yield and rain,

391

INDEX

Gray, Governor George (S.A.), 147
Greenway, F. H., and Old Colonial
Architecture, 64

Grey, Earl, and “ Pentonvillains’*,

. *54

Griffith, Sir Samuel, and Kanaka
labour, 251 seq.

plans United Provinces in Queens-
land, 256

subsidizes central sugar-mills, 254
Grose, Lieut. -Gov. F., and rum trade,

Hannan and Flannigan find Golden
Mile, 353

Hargraves, E. H., finds gold near
Bathurst, 168
on W.A. rocks, 231
Harvesters, duties on stripper-, 417
Excise Act, 398

Hawkesbury “moonshine’*, 26
Hawkesbury settlers, Macquarie to,
76

petition to Hunter, 26
Hawkesbury valley agriculture, ^seq.
Herbert, R. G. W., land laws of, 237
borrowing policy of, 238
Higgins, H. B., and industrial ar-
bitration, 375

Higgins, Sir John, and B.A.W.R.A.,
433

Hobart Town in 1829, 94
Hobson’s Bay Railway Go., 288
Hoskins, G. and C., Lithgow iron-
masters, 420 seq.

Hotham, Governor Sir G. (Vic.), 1 76
Hughes, W. M., 400 seq.
promises a Tariff Board, 428
purchases “Strath” steamships,
404

tariff of 1920, 426

Hume, Hamilton, exploration to
Gorio Bay, 97
Hume Reservoir, 442
Hunter, Governor John, 28

Immigration, and public works
(Qld.), 238

of Chinese, 181-2, 279
See also Wakefield, E. G.; Gawler,
Governor George; Chisholm,
Caroline

45J

Implements, Tariff Board on agri-
cultural, 429

See also Harvesters ; McKay, H. V. ;
Ridley, John

Index-numbers, use in arbitration,
382

Interstate Commission. See Com-
mission

Investment in Australia, British,
287 seq., 298 seq., 328 seq.

Iron and steel. See Steel
Irrigation colonies, 440
in Goulbum Valley and Wim-
mera, 344

Java, imports of raw sugar from, 437
Jury, trial by, advocated by Mac-
quarie, 72
grant of, 135

petition to Governor Bligh for, 45

Kaleski, R. L., quoted, 126
Kanakas, cotton cultivation by, 243
seq.

Kelly Gang, exploits of, 216 seq.
“Kelpies”, origin of, 126
King, Governor P. G., 31 seq.
Kingston, Charles Cameron, ad-
vocates compulsory arbitration,

370

Federal Minister, 397
Navigation Bill and, 401
Kingston, G. S., intrigues against
Col. Light, 145
Knox, Sir Edward. See Sugar

Labour, pastoral, N.S.W., 23, 112
seq.

gold discoveries and, 122
in V.D. Land, 94
“ Pentonvillains ” as, 120
Labour Defence Committee, 1890,

323

Labour Movement, and fiscal issue,
367 seq.

in N.S.W. Parliament, 366
in Queensland Parliament, 374
in Victorian Parliament, 372
structure of party, 234
See also A.W.U.

Labour unions, A. L. Federation of,
321

INDEX

452

Labour unions, shearers’, 318
mining and, 317
pre-gold, 316
See also Arbitration
Lambing Flat, attack on Chinese at,
181

Land, sale of, 104, 136
Wakefield, E. G. and waste, 140
seq.

Land^ Convention, 1857 (Vic.), 213
Land grants, to “expirees”, 13
prior to 1825, 79

Land orders for immigrants (Q.ld.),

237

Land purchase regulations, 1 844, 1 93
Land sales and speculation, 189
Land settlement, by free selection
(N.S.W.), igqseq.
in Queensland, 240
in S. Australia, 21^ seq,
in Tasmania, 227
in Victoria, 2J2^fq,
in W. Australia, 230
Lands, Commissioners of Crown, 1 91
Lands Department (N.S.W.), con-
fusion in, 206
Lane, William, 320 seq.

Lascelles, Edward, and Victorian
Mallee, 344

Latrobe, Governor C. J., 172 seq.
Leasehold tenure, J. Carrutliers and,
337

Lennox, David, bridge-builder, 283
Lithgow (N.S.W.), iron and steel
works, 418 seq.

Location, limits of, Governor Dar-
ling and, 100

Log-rolling for public works, 294,

307

Lord, Simeon, J.P., 71
Lowrie, Professor, and superphos-
phate, 226, 345

Macquarie, Governor Lachlan, 12,
48, 62 seq.
apologia of, 76

McArthur, Elizabeth, at Parra-
matta, 24

McArthur, John, inspector of public
works, 28

opinion of Governor Macquarie,
48

McArthur, John, parentage of, 14
quarrels with Governor Bligh, 41
seq,

quarrels with Governor King, 35
seq.

quarrels with Sir J. Banks, 80 seq.
“wool-gathering” of, q^seq.
McCulloch, Sir James, proposes
tariff, 266

opposed by Syme, 268
McKay, H. V., invents stripper-
harvester, 222

litigation re Excise Act, 376, 399
Proprietary Ltd., and export
trade, 416 n.

Manufactures, boot and shoe, 41 3 seq.
efficiency of, Inter-State Com-
mission on, 41 1
increasing costs of, 396, 410
iron and steel, duties on, 417
protection according to costs, 416
Victorian and N.S. Wales, 271
Marketing of produce in war-time,

430

Marsden, Rev. S., and Governor
Macquarie, 71
as sheep-breeder, 85
Masters and Servants Acts, 320
Melbourne, financial eclipse of, 331
seq.

Merinos. See Sheep
Mining methods in Victoria, 179
Mint, Sydney, establishment of, 179
Mitchell, Major Thomas, explora-
tions of, 99

road construction by, 282
Monaro Tableland, free selection
on, 205

Money. See Currency and Rum
Moreton Bay, convict settlement at,

135

Morgan, Mount, gold-mine, 303
Mort, T. S., and refrigeration, 342 n.

wool-sales by auction, 131
Mount Alexander and Murray Rly.
Co., 288

“Mullenizing”, origin of (S.A.), 221
Munro, James, Premier of Victoria,
333

Murray, John, sheep-breeder, 226
Murray River, customs barriers on,
273 seq.

INDEX

Murrumbidgee,Throsby finds R., 97
irrigation colonies on, 441

Mutton, frozen, 342

Navigation Bill and Act, 401 seq.

Navy and “black-birding”, 244 n.

Newcastle, Duke of, on colonial
boundaries, 250

Newcastle (N.S.W.)> steel-works at,

421

New England District, free selectors
in, 204

New South Wales, founding of, 3
prosperity in ’nineties, 335 seq.

New South Wales Corps, 14, 16 seq.

Northern Rivers (N.S.W.), free
selectors on, 204

Notes, “Colonial currency” of
private, 52

inconvertible (Q,ld.), 239
Treasury issue of, proposed

(N.S.W.), 303

O’Connor, G. Y., engineer (W.A.),

353

Orders in Council (1847), in S.A.,
222

in Victoria, 194, 212
origin of, 193

Over-capitalization of pastoral in-
dustry, 204

Oxley, Surveyor-General John, 97

Parkes, Sir Henry, advocates revenue
tariff, 271

proposes exclusion of Chinese, 279
resignation of, 366

Parramatta, public agriculture at, 6

Pastoral industry, advantage over
agriculture, i^^seq.
campaign for secure tenures, 192
seq.

effects of free seleciion on, 210
effects of gold discoveries on, 168,
184

extension to inland Queensland,
236^

Pastoralists, damaged prestige of,
210

denied security in S.A., 222
inexperience of pioneer, 95
western advance of (N.S.W,), 100

453

Peel, Sir Robert, reform of Penal
Code, 152 seq.

Peel, Thomas, at Swan River, 138
“ Pentonvillains ”, 12 1, 154
Phillip, Governor Arthur, break-
down of, 13

disorder after departure of, 17
instructions to, 4, 12
relations with McArthur, 14
Piece-rate wages, arbitration and,
379 seq.

Plough, first in Australia, 30
stump-jump, 221
Police, in early Sydney, 34
on Victorian diggings, 175
Pooncarie, burning of “Rodney”
at, 369

Population, according to birth-
places (1861), 182
growth of, 1870-1890, 296
Ports, social similarity of, 234
“Powers’ Three Shillings”, 382
Pre-lease, right of free selectors to,
i^Ljseq.

Price-level, changes in general,
184 n., 313, 32?, 329, 355, 370,
374, 382, 396

Prices, function in guiding economy,
446

Production, advances in primary
(19DT-29), 386

Protection, arguments for, 264
effects in Victoria, 268
in S. Australia, 271
New, origins of, 398
“Protection all round”, 427 seq..

Queensland, separation for North,
247 seq.

settlement in, 240

Rabbits, spread of, 225, 340
Railway, projects for North-South,
289, 360

rates and revenue, 291, 305
transcontinental West-East, 406
transport of wool by, 290
Railways, associated enterprise and,
287

Commission management of state,

305

companies, 288 seq.

454

INDEX

Railways, deficits, 306
intercolonial, 259
public borrowing for, 293
rate-making on state, 305
stimulus to primary production,

295

Rations, and rum traffic, 19 seq,
effects of station, on labour, 1 14
in early Sydney, 13
Red l^ibbon Agitation, Bendigo, 175
Redfern, William, and magistracy, 7 1
Refrigeration of mutton (N.S.W.),
342

Reid, G. H., Premier of N.S.W., 336
advocates Federal revenue tariff,
397

and G.S.R. Co., 434
resists compulsory arbitration, 370
Ridley, John, inventor of “stripper”,
219

Riverina, free selection in, 200, 205
Road constructional. Tipping on
concrete, 2^7 ^
local authorities and, 287
Roads, disrepair under Governor
Brisbane, 134
turnpike, 66

Robertson, John, and free selection,
seq.

Robinson, Sir Hercules, 276
on public works policy, 294
Ross, Major Robert, lieutenant-
governor, 6

Rum, consumption of, 37, 51
currency, i^seq.
hospital, 50

Hunter’s attack on trade in, 33
King’s measures, 35
Macquarie’s measures, 49
“Rum Puncheon Rebellion”, 45
Ruse, James, first settler, 6
Rutherford, James, ironmaster, 419
See also Cobb & Co.

Sandford, Wm., ironmaster, 420 seq,
“Scabbing”, A.S.U. methods against,
320

Seamen’s Union and Navigation
Act, 405

Selection before survey, free, 1 97 seq,
effect in W.A., 230
effects on pastoral industry, 203

Selection before survey, reformed by
Carruthers, 337

settlement of Bega district, 204
social effects of, 207
why persisted in, 209
Separation, N. Queensland Move-
ment, 247

and Australian Federation, 258
backed by pastoralists of Central
Queensland, 256

Settlers, free, and Governor Mac-
quarie, 72, 134
Sexes, disparity of, 161, 162
“Shanties”, and station labour, 114
at diggings, 171
beyond the Darling, 206
Shearers’ lock-out, Queensland, 1891 ,

325

Shearers Union, Amalgamated, 318
Sheep, Bengal, used by McArthur,
79

brought by First Fleet, 7
cost of running, 1 19
decline of British, 91
Merinos, and drought, 389; from
Cape, 80; from Royal Stud, 83
Rambouillet Merinos, 91
Saxon Merinos, 89 seq.

South Australian Merinos, 226
Shepherding system, 82, 1 12 seq.
Shipping, Chinese labour on coastal,

277

coastal, and Navigation Act, 401 ;
freights on, 410; navigating
officers’ strike, 323
ocean. Commission on, 403
Slopes, Western (N.S.W.), free se-
lection on, 205

Smith, Jas., “Philosopher”, finds
tin (Tas.), 229

Smith, W. J., finds gold in N.S.W.,
168

Smyth, — , finds gold in Port Phillip
District, 169

Soil-exhaustion in S.A., 222,226,230
South Australia, Anthony Bacon
and, 142

influence of gold rushes on, 2 1 9
Murray River and, 143 seq.
norm of colonial progress, 149
pasture v. agriculture, 222
wheat-growing in, 219

INDEX

455

Spain, fine wool production of, 8 1 , 89
Speight, Richard, 305
attacked by The Age^ 333
Spence, W. G., founds A.M.A. and
A.S.U., 318

opposes waterside strike, 322
“Squatters’*, early use of term,
lOi n.

See also Pastoral ists
State instrumentalities, doctrine of,

378

“Stadon”, probable origin of term,
loi n.

Steamships, coastal, 279, 401
Commonwealth Line of, 405;
purchased by Lord Kylsant, 406
Steel, origins of Australian manu-
facture, 419

Stirling, Captain J., at Swan River,

137

Stocks, 1877 Act re Colonial, 294 and
note

Store, Commissariat, 34
Store-ships for early Sydney, 8 seq.
Strike, Maritime, of 1890, 323
Shearers’, of 1894, 369
Sturt, Captain C., explorations of*
98 seq.

Surveyor-General in S.A., 146
Sugar, Buhot manufactures, 241
central mill system of making, 253
Colonial Refining Co., 247 seq.
Commonwealth policy regarding,

436

extension of industry northwards,

245

Kanaka labour, 242
war-time control of, 436 seq.
Superphosphate. See Soil-exhaus-
tion

Swan River Settlement, 137 seq,
Sydney Railway Co., 289
Syme, David, early hie of, 261
on land- values, 309
Victorian post-boom policy of,
333

Tariff, McCulloch proposes protec-
tive (Vic.), 266

agricultural implements and, 417
Berry raises Victorian, 268, 334
Board, appointment of, 428

Tariff, borrowed imports and, 304
Colonial Office and reciprocal,
^7^ seq.

Commonwealth Customs, 397
effects of protective, 269
exporters’ costs and, 396
reciprocity proposed by Tas-
mania, 274

reforms by G. H. Reid (N.S.W.),

340

reports of Inter-State Commission,
410

revenue from (N.S.W.), 271-2
scientific, and “anomalies”, 416
Tariffs, early colonial, 263
Tasmania, after 1850, 227
and intercolonial tariffs, 274
Telegraph, overland, 358
Telegraphs, extension inland, 296
Territory, Northern, 357 seq.
Thompson, Andrew, J.P., 71
Tin, discovery of (Tas.), 229
Todd, Sir Charles, and overland
telegraph, 358

Trade unions. See Labour unions
Transport, inland, dee Cobb & Co.,
and Railways

Transportation, Archbishop Whately
on, 1 51

modified system of, 153 seq.
Turner, flenry Gyles, on banking,
302

Van Diemen’s Land, bushranging
in, 93 seq.

prominence in wool-growing, 92
swamped with convicts, 153
Victoria, dominant position in ’six-
ties, 260

emigration from, 264, 271 n., 335
land settlement in, 2 1 2 seq.
pastoralists’ claims in, 194
separation from N.S.W. , 169

Wage, sacrosanct basic, Higgins, J.,
and, 375

in unprofitable trades, 385
Wages, by “truck ” at station stores,

in early Sydney, 21
Wages Boards, Minimum, 370 seq.
limited functions of, 373

450 INDEX

Wakefield, E. G., and South Aus-
tralia, i^*^seq.
on Swan River colony, 1 39
theory of ‘‘sufficient price”, 140,

233

Water-supply for W.A. goldfields,
352 seq.

Weld, Governor F. A. (W.A.), 230

Wentworth, D’Arcy, and rum
ifospital, 50

Wentworth, W. G., and modified
transportation, 153
crosses Blue Mountains, 65
seeks security of tenure, 192

Western Australia founding of, 138
request for convu ♦s, 150, 230
rush to goldfields u., 349
shipping, coastal, 40 ^

Whately, Archbishoia and trans-
portation, 151

Wheat and wool, relative transport
costs, 291

Belts, extension since 1902, 391
compulsory pooling of, 430
crops since 1901, 395
early prominenc<* of V.D.l/., 228
farming, in Mallec (V.), 344; in
N.S.W., 338 seq.\ in W.A., 355
seq,\ in S.A. during ’seventies,
219

Wheat and wool, prices, official, 39,

war-time marketing of, 430
yield and rainfall (Graph), 393
White Australia policy, 362
Wimmera District, wheat yield in,
393

Wire-netting, dumping of, 429
Wise, B. R., and Arbitration Act
(N.S.W.),37i
Wool, B.A.W.R.A., 432
British fiscal policy and, 88
falling price of, 308 seq.
manufacturers and colonial, gi
marketing, 127 seq.
origins of industry, 79 seq.
prices, before gold, 120; in ’sixties
and 'seventies, 1 28-7 ; in ’eighties,
308

renewal of activity after 1841,
106

sales in Australia, 132
wai-time appraisement of, 431
yield per sheep, 120, 127, 390
See also Pastoral industry
Wool-clip, variation in total, 390
graph showing, 394
Wool-sheds, burning of, 369
Works, public, Macejuane’s, fig seq.\
Qiiceiislaiid, 237 seq.

(.ambridge: printed by w. lewis, m.a., at the university press

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